Question

Question 1 An economist uses economic analysis to study and interpret our world. Economic analyses often contrast. Sometimes there is no ‘right’ or ‘wrong’ answer. However, there are good and bad economic analyses. You must learn how to make good economic arguments.

In this assignment, you will use economic thinking to pose and answer a question inspired by a real-world problem, series of events, or circumstance that happened to you. The topic is completely up to you so long as you use economic thinking to consider and answer the question. Your analysis should be approximately 500 words or less, and should be written in plain English of a standard suitable for the Straits Times’ Forum or Opinion pages. You should avoid using mathematical equations or excessive use of economic terminology.

You should concentrate on issues that you have directly observed and have some (noneconomic) knowledge of. For example, please do not explain what determines crude oil prices or how to improve Singapore’s productivity growth. While these are important questions, they cannot train your ability to use economics because your answer will simply summarize what others say. You should develop your thinking, not your ability to summarize. Independent and original thinking will help you develop your skills the best.

Here is the assessment grading rubric: a) Your title, which should consist of the question or problem you are examining. Titles tell people whether your work is worth reading and without a good title, you can’t catch the attention of a client or of top management. Work on this!
b) Whether your topic is interesting and novel from an economic point of view. This is subjective. Interesting topics could be those which do not seem, at first, to be amenable to economic thinking, such as non-market activities. However, everyday economic exchanges can be interesting if you focus on a point that is unusual, or inconsistent with simplistic economic reasoning. Perhaps the test is: Would a nonfinancial newspaper devote space to covering the topic?
c) The economic integrity of your argument. Is the economic reasoning logical and consistent with standard economic theory; if not, does it explain clearly why the standard economic principles do not apply?
d) Your ability to explain economic arguments to a non-economics audience, including your use of English grammar and language. While this is not an English course, you will never convince anyone you are an expert on any topic if your plain English is plain bad.

Answer 1

            Here I will give you a very interesting case study example.

REALTIONSHIP BETWEEN UNEMPLOYMENT AND GDP

            The relationship between the unemployment and GDP is very important. The growth of any country is depends upon these two factors. This relationship is well explained by the Prof. Arthur Okun. This explanation is well known as Okun’s law.

Further Prof. Okun said about the relationship between unemployment and GDP of a country is related. He further explained in his law that “if increase in the rate of unemployment will decrease the twice the rate of GDP. For example, if rate of unemployment is increased by 1%, then rate of GDP falls nearly 2%. His general thinking is that if rate of unemployment falls, the production of a country will increase. And this measure will be used for estimating the GDP and GNP. These measurements generally vary from country to country.

Here I am discussing the case of India and Okun’s law.

Published data regarding unemployment is not reliable even the numbers are published by the reputed labor bureau are based on its survey of around 10,000 labor intensive units. The data says that the unemployment rate in India is five years high.

Recently the case happened in the India regarding the demonetization and unemployment. The government is ruling in India is political party call BJP (Bhartiya Janta Party) they won the parliamentary elections in the year 2014 and started ruling. They have election manifesto like we will bring back the whole black money deposited in foreign banks. But they were failed. To dig out black money they use one trick that is demonetization of old circulating currency notes and issue of new currency notes. This announcement was made by prime minister instead of Central Bank’s Governor. Everyone welcomed this demonetization but on the other hand due to shortage of new currency notes the cash businesses were started collapsing and also wind up. Because of business wind up the millions of employed becomes unemployed, and productivity rate is in like recession. And in between after 2-3 months the funny news given y the Central Bank’s Governor is that he said 99% of old currency notes are deposited with Central Bank., then where’s the black money???

            Apart from this The government’s demonetization decision have resulted in the loss of roughly 1.5 million jobs, in nearby 4 months from November 2016 to March 2017. The further loss is much bigger, don’t forget about that, because of demonetization move the GDP of India saw a major decline in manufacturing and the lingering effects of demonetization sharply pulled down India's economic growth rate in the first quarter of the current fiscal ended June to 5.7 per cent, as compared to 7.9 per cent in the same period a year ago. Barely six months after demonetization, India's Gross Domestic Product or GDP growth rate has slumped down to 6.1 per cent in the January-March period, lowest in more than two years. This growth rate was unexpected as the Central Statistics Office earlier in January had estimated 7.1 per cent growth as compared to the 7.6 per cent in 2015-16.

            Here I am not blaming the government and it is purely my point of view. But in conclusion I must say that the Okun’s law is actually realistic. Some say it is not up to the market but it is actually works

References

1 www.catchnews.com

2 Investopedia

3 Times of India

4 Business Today

5 Investing Answers.