Question

Chapter 3 (Supply and Demand) - Written Assignment Surf the web and try to find a newspaper article about the equilibrium price of a good or service changing due to a shift in the supply curve or a shift in the demand curve (please use an original example that has not already been covered in the book, power points or videos). Using supply and demand analysis and information from the newspaper articles, explain what is happening in this market that is causing prices to change. There may be shifts in supply/demand or both curves that is affecting the equilibrium price and quantity. Try to keep it simple and find an article in which only one curve is shifting. Explain how the shift of the curve affects equilibrium price and quantity. Please include a graph of the supply and demand model, showing what is happening in the graph according to the article. Must be about one page long (250+ words). You must answer the question in detail and include a supply and demand graph which reflects the scenario happening in your newspaper article.

Answer 1

Recently newspaper articles posted in Washington post in 2018 describes best strategy for UsA in determining high prices of goods and services like basic Food grains which has seen higher inflation around 3.2%.

Summary:

The biggest issue been surfaced is US China Trade War, Immigration Laws, US National Debt, Foreign Relations policy  

US and china have great history of trade wars however recent times has been largely due to sanctions been imposed on china by USA.

Recently, USA slpped tarrifs on 40% of chinese goods. which has caused prices of US goods to go up substantially becuase cheap imports fro china have been stopped.USA has also stopped cheap imports of steel and as a result Chinese government too has imposed substantial tarrifs on USA goods.

As a result, there has been currency devaluation in China to make it goods look more cheaper and attractive and has started selling Goods in emerging markets. US goods however have become more costlier and hence sales have decreased.

Chinese government has aggravated trade war by imposing fresh round of tarrifs , however before G20 summit which will be held in 2018, such issues will be resolved.

Since, China has imposed tarrifs we see there has been lack of entry of chinese workrs and visas in USA which has nullified the clear cut winner. Because of trade war, India has managed to export steel and aluminium to US markets and hence has been the greatest beneficiary.

Given the Presidential Power following economic strategies need best case implementation :

Resolution of NAFTA deal with negotiation and simultaneously maintenance of great relationships with South Korea on denuclearization by maintaining an eye on all developments is critical  

US China pact and removal of tarriffs by signing of MOU and economic cooperation is must to bring down high prices if commodities  

Immigration laws been relaxed by allowing H1B for Indians who look to create startups IN UsA and generate more employment which will bring down illegal immigration issues.

Debt refinancing and additional taxation on corporates with large market Capitalization to decrease national debt is imperative to bring down overall inflated economy .

Increasing interest rates to appreciate dollar and control inflation and money supply in market. This policy is also termed under contractionary monetary policy which reduces aggregate demand and hence prices.

References:

Bailey, Martin Neil, What Happened to The Great American Job Machine!? The impact of trade and electronic Offshoring.

Cline, William R 2004. Trade policy and Global Poverty. Washington : Institute for International economics