Question

5. For one important and interesting idea that you have learned so far in the course based, write a one page essay beginning with the following statements:

Although before this class I believed …….., in fact……..Or,

Although it is tempting to believe……., in fact…..Or,

Although it might seem that …………… is true, in fact……

Then explain why you or others could believe the idea that is fact incorrect. In other words, what is logical or compelling about this incorrect idea.

Then explain carefully why the original idea is incorrect.

Then explain why it is important that we understand the idea correctly.

Finally, use at least one concrete example to illustrate why misunderstanding the concept leads to a problem that is resolved if we understand the concept correctly.

Answer 1

Ans.

Although before this class I believed in unemployment, in fact I understood it well and thought I understand how it works, however after attending this course I was surprised to understand how in details it works.
My initial understanding was that the unemployment is seen immediately during the financial crisis or when there is worldwide recession.
What I understood in this course is that unemployment is a lag indicator of the business cycles.
For e.g. because businesses wait until downturns look genuine to lay off, and wait until recoveries look secure to rehire, this measure is important because it lags the cycle on both the way down and the way up.
Going forward after this course I will not focus on the unemployment rate as an indicator to assess the business cycle. Rather I will focus on Average weekly hours, manufacturing. This is in fact leading indicator of the business cycle.
Because businesses will cut overtime before laying off workers in a downturn and increase it before rehiring in a cyclical upturn, these measures move up and down before the general economy.