macronotmarco

[macronotmarco]

Chapter 7

I am someone that has strong feelings about population. There are so many reasons that the growing population is a problem socially and ecologically. We are already not taking care of our young well enough there are food shortages and so many kids in the foster system. We are also in serious trouble ecologically, our planet can not afford more humans creating waste on it. The positives are more working bodies is good for the economy. I fall in this place because I grew up rough and I don't think the health of the economy should be more important than the health of the people in it. I don't think that parents should be subsidized, people don't need to be encouraged to have children, especially the ones that need the subsidization. We don't need more kids to grow up in broken families and/or in poverty like I did. Just so they can grow up to be underpaid and in poverty like their parents. I think population growth due to immigration is fine. I take issue with making new humans, not helping ones that already exist.

[macronotmarco]

Chapter 14

[macronotmarco]

Chapter 8

Deficits increase the increase the demand and decrease the supply of loanable funds.

When inflation is high the interest rates will likely rise with it, with the high inflation we are dealing with right now the interest rates are likely to be high as well. The loanable fund market helps choose what investment projects are funded because it gives those people an idea of where the interest rate is and how much will be loaned out. You wont start a big expensive project if you wont be able to get appropriate funding for it. ROI has to do with how the investment has grown over the length of its life. With a lower interest rate more will be invested leading to higher growth.

[macronotmarco]

Chapter 6

The problems with the consumer price index are serious, It is important we are getting accurate information. That information has to be flexible enough to follow the changes that come as time goes by, it has to work for us and we should have to work as little as possible to get accurate and whole information from it. There was a chapter in my accounting class about accounting information systems, it is important for those systems to work like that because they help lower the human error factor and provide more accurate and up to date information. What's the point if it doesn't yield accurate data?

Inflation rates will be different between different places no matter where, one urban area will be similar to another but if they are on opposite ends of the country they will have differences. The inflation rates between rural and urban areas will be less similar. People who live in urban areas will have a completely different lifestyle from those who live rural. There is more inflation in the rural areas, it is necessary that individuals have a vehicle here and that they buy more fuel than those in urban areas. Large animal vets and other agricultural services have also had to raise their prices which would rarely affect someone who lives in an urban area, most people don't have cows in their apartments. Where I live is more urban, however I grew up on a farm and have family who are still there.

If the CPI were more reliably accurate in every situation i think it would be appropriate to use in all of these applications, however it is not. I think using it in general and widespread applications is more appropriate. But when the decisions made using the CPI will affect individuals it is not as appropriate. It is really important that it is accurate in these cases because if it's wrong it could cause harm especially in situations where it over estimates. For example the school lunches, if it causes us to price them above what people in the community can actually afford, there may be kids that go hungry. If it is off in the other direction people may take unfair advantage of the help systems in place.

[macronotmarco]

Chapter 18

You have been a great teacher and the assignments you give are fair, I just don't have a mind for this stuff. When I try to understand the concepts my ADHD brain says "THIS DOES NOT BRING JOY" and tries to throw it out the window. I have the same issues in therapy working on trauma, and I think it frustrates my therapist to no end. It's hard to work on trauma when your brain wont let you think about and analyze it. And apparently my unconscious coping mechanisms classify economics next door to trauma. I hate it too, but that seems to be the way it works. I am not looking forward to Micro, I'm just hoping that its easier to apply to things I'm familiar with. I seemed to do okay when I could apply the concepts to something I understand.

What I could absorb will definitely help me with concepts int he future though. How the Fed controls the money supply and how inflation works as well as supply and demand. It less changed my thinking and helped me understand how to think about it.

The debate on whether to try to stabilize the economy or not seems important to me. I still don't feel educated enough on this to have my opinion hold any weight whatsoever. I'm a big fan of the scientific method, while studying something you get the most reliable conclusions when you have a control and change as few variables as possible in the study. You cant exactly have a control economy but ideally you allow it to function as naturally as possible and only intervene when absolutely necessary and when you have a sound hypothesis of how your intervention will affect it. So I suppose I would agree with the con side, in that policy makers should leave it alone and like a doctor take a do no harm stance and only treat the diagnosed issues. That said we didn't advance our medical knowledge by doing no harm.

[macronotmarco]

Chapter 17

More inflation equals more employment in the short-run.

[macronotmarco]

Chapter 16

The Federal Reserve Board initially lowered the policy rate, stabilized financial markets, and introduced lending facilities to support the flow if credit and initially lessen the impact of Covid-19. It looks like they were successful in that, now they are trying to undo what they had done to bring everything back to normal. The government worked to keep money moving and enable business to keep their employees. They sent out the stimulus checks and the PPP loans. From my position it looked like it helped, the business I worked for at the time had our business severely drop, especially when everyone was staying home. The owners were still able to pay us and keep 4 people on. However, later on I found out that you can actually find out how much a business got and for how many employees. I found out the business I worked for claimed 3 more employees than they actually had, I find this extremely frustrating and wonder how many others did this, and how they are getting away with it. Now they seem to be doing what i think they should be and working to stabilize. So while I don't dare say they should listen to me, they seem to be doing what I would recommend.

[macronotmarco]

Chapter 13

The Case Study section "The Increasing Openness of the US Economy" is an interesting read. I didn't know that the cut flowers that are sold here in the us were grown in Israel. Movies are a major export of the United States and he ease of transport has a lot to do with who we trade with. An item that is easy to transport with a higher price is likely to get traded further. Obviously the government would create policies about trade that benefit us, but Trump thought that he could change things to give us better trades. With some googling it looks like a prominent step he took was raising tariffs, and it didn't help.

When I did the homework for this chapter the questions concerning the nominal exchange rate really confused me. I know it is something that is probably pretty simple and important to understand especially if you were to travel internationally. I just couldn't get the appreciation and depreciation bit through my head, i think because i was confused about what form of currency it was referring to. Re-reading it now it makes a lot more sense. Also there is the bit in parenthesis about how the bank posts differing prices from the actual exchange rate. I wonder if they are transparent when you are standing at the counter about how much extra you are paying so they get their profit. Which is fair, but do they tell you?

The paragraph on arbitrage made me thing about a rumor I heard about someone who used to work at my job but left before I started. We benefit from a really good employee discount, and apparently she would actually buy food and then re-sell it for a profit. Obviously not a very good thing to do but it sounds a bit like arbitrage. Somehow, I doubt that it would cause the prices to become the same and more likely she would have just gotten fired. So, not really the same thing, but interesting. It's not clear in the description though whether arbitrage is a good thing or not. It is good to cause the prices in different places to even out? And can it happen anywhere?

[macronotmarco]

Chapter 5

The Components of GDP. What are the components of GDP? How do we measure the components of GDP to get to that number? Consumption, Investment, Government Purchases, and Net Exports. There is an equation using the numbers from these terms to come to the GDP. GDP=Consumption+Investment+Government Purchases+Net Exports. Consumption is good and services purchased and consumed by households, the only exception to this is the purchase of new housing. Investment is purchase of capital something you can use to create more good or services. Government Purchases are the goods that governments purchase, pretty straight forward. Net exports are the things produced here and bought by the people out there, minus, the things produced out there and bought by people here.

The US's current GDP is 23 trillion USD. I attached an interesting graph showing the GDP quarterly percent of change the first two quarters of 2020 and the first of 2022 are actually negative. Also interesting is how the second and third quarters of 2020 are so different, what happened in that third quarter to make the change so high and why didn't it continue in to the fourth quarter. Did it have something to do with the stimulus checks? Covid still seems to have an affect well into 2022 the negative in quarter one was when cases ramped up again. I actually got covid during this quarter, and I definitely had less if an impact on the economy while I was sick. If peoples health impacts their impact on the economy then it definitely affects the GDP.

[macronotmarco]

Chapter 9

I save so that I can do and afford the things I want to be able to do and have backup funds in case of an emergency, a vacation, or vet bills (broken dog toes are expensive). A firm needs to pay us because otherwise why would we let them hold it? After all, they're likely using it for something, there has to be gains for both parties.

Right now I personally can't take much risk, I don't have the funds to do so. If I risk it and lose I could not be able to eat or be able to take care of an emergency. The plan in the future is to be able to take risks. In fact my future career will involve a lot of risks. As a glassblower we are working with a volatile material that has the possibility to go really wrong. Right now I am sitting next to a cracked glass brown trout while my partner paces the house calling other glassblowers trying to find information on why this may be happening. Glass has so many variables it relies on to all go right and when something goes wrong in most cases we lose everything put into that piece. This broken piece next to me has about $400 worth of color and time and work and wages put into it. Now it is worthless and we have to make another in the next week because the client has already paid for it as a Christmas present. This is just a piece that we made at someone else's rented studio, we are planning to build our own studio this summer and being such a complex art form that we need so much complex equipment for. If we get everything built and just one piece of equipment breaks down then we can't make any money until we fix it. So, yeah, risk. The return is that when everything goes right we make a ton of money and the way the math works out we would only have to make two and a half pieces a month to break even. And thats just at the current prices, you always keep getting better with glass, there is no ceiling on skill and therefore no ceiling on profit to be made. Just look at Chihuly, he hasn't blown in years and has people he has trained to make his style of work with simple bowls going for thousands of dollars. So in a few years we will have doubled what we can charge for our pieces and still have demand. A ton of risk, but also a ton of return.

I'm currently working on a bookkeeping degree so that I can run that part of our business, not much risk to a bookkeeping degree because even if my relationship with my partner burns to the ground I have that to fall back on. There are bookkeeping jobs everywhere and while I may not make as much as I would glassblowing I would still be able to live comfortably.

I value glassblowing a lot it is an incredibly fun thing to do especially for those of us who love chasing adrenaline. The benefits are worth the risks even with the monetary part removed from the equation. I love doing it even with the risk of physical harm that comes with it. You may get burned working with glass and there are serious lung issues that can come with using specific techniques. My partner had a spike of glass pop off a piece and go right through the middle of his dominant index finger, he has no feeling from the second knuckle to the tip partially from that and partially from the years of nerve damage due to burning it (inside and out).

Its worth it.

[macronotmarco]

Chapter 10

There will always be a at least some unemployment for multiple reasons. Frictional unemployment is one. It is because the demand for labor will fluctuate for employers. When an industry makes a product that is not in demand they will lay off workers that they don't need and other industries that are in demand will hire these people. This type of unemployment is usually short-term. Job search is another reason for unemployment, people have to find jobs that are right for their skills and personality. It is when workers are finding the right jobs that suit them, because not all workers are matched perfectly to all jobs. A woman in a wheelchair probably couldn't and wouldn't want to work on an oil rig, and a man with dyscalculia probably couldn't and wouldn't want to be an accountant.

Unemployment insurance would be a policy that affects the unemployment rate. It inadvertently can causes more frictional unemployment because it provides a safety net for job loss. People will take longer to choose a new job because they aren't as pressured by lack of income during the unemployment period. They may also not negotiate their employment terms so carefully. Essentially it allows people the freedom to be picky about where they spend 40 hours of their lives every week. Unemployment insurance may not have a positive effect on unemployment rates but it is probably positive for the people who need to use it as it allows people to find the best fit for themselves.

Were I designing an unemployment program there would be incentives to find employment, time limits would be reasonable. While we want people to find the right fit we don't want long term unemployment. These programs should consider type of unemployment and length of unemployment. Even though unemployment rates aren't a perfect scale of economic health we still want people in the work force.

Twice the amount of job openings as people looking for work wouldn't change my answer.

[macronotmarco]

Chapter 11

The cash in my wallet is pretty important to the money supply because cash makes up a part of what the money supply is. What it it considering cash though. Because people are carrying less and less actual paper cash. I almost exclusively use my debit or credit cards. I only have cash if someone has given it to me as a tip or payment for assisting another glassblower. The only time I take cash out is to pay my bills and thats only because the house accounts are at my partners bank and it's easier to hand him cash than figure out how to transfer it.

The FRB was created by the government when they realized they needed a central bank, and the chair is appointed by the president. It regulated banks and ensures the health of the system so it essentially is the government of banks. They're supposed to make independent, non-political decisions, the long terms for the board of governors is supposed to help them not be politically driven, the chair is appointed by a politician though so...

The FRB probably spent the first two years of the pandemic increasing the money supply in an attempt to get the economy moving again. During the pandemic people stopped spending so much money because they were staying home instead of vacationing or buying lunch for work. People need to buy stuff for the economy to work and they wanted to make it more feasible and likely that people would buy because they didn't have the pressure keeping them from making purchases that they would have otherwise. I have no idea whether they have overshot or not. Would our property taxes on our home going up be a sign that they have overshot or undershot? In the last year our taxes have gone up nearly $200. I am worried about future inflation because we are landowners and will soon own more land and we plan to grow our business and stake in the economy exponentially. I feel absolutely lost on how all this works and it stresses me out to even think about it.

The Fed has likely begun reigning in the money supply growth because it has overgrown and is causing inflation to rise too far. They will sell securities to the public to pull money out of the supply and start lowering inflation. They can raise the banks reserve requirements and/or pay interest on those reserves causing the banks to hold more.

[macronotmarco]

Chapter 12

What are the costs of inflation (there is a list in the text)? Which is most important? How about deflation? Would that be a problem and for whom? The FRB worries more about deflation. Why? Do you agree? Why or why not?

Currently the risk appears to be inflation.  Is that something you consider when making economic choices in your life?  If you are still in high school ask your parents if they consider future inflation.

The costs of inflation are: Shoeleather costs, menu costs, Relative-price variability and the misallocation of resources, Inflation-induced tax distortions, Condusion and inconvenience, and arbitrary redistribution of wealth.

It seems like the costs are all steep and there is not necessarily one that is more important than the others, more that in different situations and for specific entities, one will be more important than the others. Shoeleather costs affect those who are experiencing hyperinflation, people in places with more stable inflation costs don't have to worry so much about shoeleather costs. Menu costs seem to affect businesses and entities who have to set prices for their services or goods, as well as those who are buying from businesses. so everyone is affected. This seems like the cost that I hear about the most while working in retail. I have seen the prices in my store go up and have listened to the complains of my customers because of it. Relative-price Variability and misallocation of resources seem like they go hand-in-hand with the menu costs. The difference between the severity of this cost in a service or food business versus the the retail business I work in is interesting because we adjust our prices on items as they come in so there is no real relative-price veriability because as soon as the price of an item changes for us we change it accordingly for the customers.

Deflation, like inflation is a problem we have to keep an eye on. It has some of the same costs as inflation and can be indicative of deeper lying issues within the economy. Sudden deflation can especially cause issues for debtors while distributing wealth back towards creditors, making the poor poorer.

The FRB is right to worry about deflation more than inflation, the costs can be more negatively impactful. they want to keep the system healthy and deflation is unhealthy.

Inflations is definitely something I think about but I don't know how much I actually consider it while making economic choices. I don't feel like I'm making significant enough waves for it to be a major consideration.

[macronotmarco]

The existence of Uber and Lyft have definitely changed things for Taxi companies. They took a service that the taxi companies basically had a monopoly on, and flipped the table on them. Uber and Lyft didn't have the same restrictions that the taxi companies did and they had a better operation. It's easier and faster to get a Uber or Lyft.

The taxi demand curve will shift to the left as the demand for taxis will drop and consumers realize that the ride sharing companies are more convenient. The ride share demand curve moves to the right as demand increases. The shift will push the equilibrium price of taxis down and possibly the equilibrium price of ride-shares up. because the demand for taxis has gone down the supply will follow. The demand for ride-shares will go up and likely drive more people to drive for the ride-share companies.

The demand for labor will drop if the minimum wage is increased, whereas the supply of labor will go up. The wage floor would have to be below equilibrium and will change if the minimum wage goes up. Honestly, I'm completely lost on this question, so thats just my best guess.

[macronotmarco]

What surprised you most about the concepts in this chapter?  Why? What would you like to do more research on? Where would you look first for more information?

Can we think about trade with China and trade with Wyoming in the same way? In what ways are they different? The same?

Give an example of a recent purchase you made that was primarily produced overseas.  Was there a locally produced option? Why didn't you buy the locally produced option? (And how did you define local? :^))

It was interesting to me how one country could be the best at producing multiple products but it it is better off specializing in the one they have the lowest opportunity cost of, and leaving it to others to produce the rest. How even though they could do it all themselves they are still ahead by specializing. What does the US specialize in, I feel like this is something I should know but I don't. And obviously no country just specializes in one thing, right? The examples given in the book are over simplification for the sake of clarity for students, right? So who primarily produces what? I would likely turn to google with these questions. Surely I'll find some site or organization that lists all the countries and the products they specialize in and hopefully will explain why. I wonder what other goods countries can produce well but don't because someone else has a lower opportunity cost?

I would assume that Wyoming's speciality is probably beef. however in a few years I'll be producing blown glass in Wyoming. Ironically, I come from a family who produces beef in Iowa. China's specialties are probably not beef.. Back to the question, we as Coloradoans probably don't think about trade with these to places super similarly. Wyoming is a neighboring state under the same national government as us. China has a completely different governing body as well as being significantly further away. They both still have different specialties from Colorado though so we can benefit from trading with both. They both have figured out where they're opportunity costs lie.

The third question only leads me to thoughts of things that I specifically bought locally and didn't consider price in the decision which is I assume is the anticipated answer to the question, that or that the company overseas produces a better product because they specialize and have done research to create the better product. However I can only think of honey and raw dog food. Honey, I want to buy as locally to where I live as possible because it will have the local allergens that will benefit my body the best. Dog food because I sell dog food and I sell a lot of frozen raw dog food. There are a lot of well known companies that sell their raw dog food all over the country Stella & Chewy's and Primal are the ones I sell the most of, both are made and packaged and shipped from out of state. I got to talk to the owner of a company called Anderson's this week and his company makes raw dog food, the only ingredient that they use that isn't from Colorado is cranberries. The food ships from their facility in Denver to us in the Roaring Fork Valley, I have never had anything from them come into our back room partially thawed or suck together like it had thawed and been re-frozen. Thawing happens all the time with the larger raw producers I get in. This means to me that the safer option for my dogs to eat and me to handle is the more local company. Even if primal were to make a cheaper and better product I would still buy the Andersons for my dogs.

[macronotmarco]

Bernie Sanders said that, " A nation will not survive morally or economically when so few have so much and so many have so little." This is a positive statement in economics. He is saying that this is the way things are. He also says, "It's time to make our government work for us and not just the 1%." This is a normative statement, it displays an action that should be taken. Why does it matter? Because of how we view them. It helps to keep them in your thoughts while studying economics because they help you determine whether the speaker is someone assisting in making policies or the scientist studying them.

Identifying the category helps you determine how to view the statement. A positive statement can be checked on whether it is factual or not, you can take a purely scientific approach to it. A normative statement can be evaluated with facts but needs more than just that. Morals, values, and differing views are applied as well.

In the table of Propositions about Which Most Economists Agree, I agree with all of them. Mostly because I know that the people making and agreeing with the statements know a lot more about what they're talking about than I do. I would like to know more about why some of the statements are what they are though. Number 10 is interesting to me mostly because I am an accounting student and currently taking my first accounting principles course and we have been talking about balance sheets and business cycles. 12 because what do they mean by 'transfers-in-kind'? As opposed to what, cash, or are we talking about trade of goods and services? Number 5, why not? Would it not provide more jobs here, is it because it is cheaper to have things manufactured there and shipped back?

[macronotmarco]

What in this chapter made you think about an economic concept differently than your previous beliefs?  

What new questions do you have now about the US economy based on this chapter?

Economics encompasses a lot more than I had ever thought about. Really, I had never put much thought at all into economics. I understood that it had something to do with trade and why people bought things. I had never thought about it also pertaining to things like time usage and prioritizing one thing over another. While reading the first principle of economics in my textbook, it was like a lightbulb went on. I understood what this class was going to be about and what the value of it to me, personally, is.

The choice to go to college was touched on in the 2nd principle. What the text describes is exactly the dilemma I was having and why I waited so long. I knew it would be expensive and a lot of work but that it would improve my life in the long run. But I had never thought in depth about the opportunity cost to what, where, and why.

Reading about marginal cost and the airline seats example, I made connections to the glassblowing work I assist on. My boyfriend makes fish out of glass, mainly those species targeted by fly fishers. When you watch people who are talented glassblowers work, they really make it look easy. But there is a lot going on behind the scenes that can go wrong. It costs him about $500 dollars (depending on species) to make a fish. Lately we have been having trouble annealing because of the clear that we've been melting and pieces have been cracking during coldworking. When an annealed piece of glass cracks that means there is tension that shouldn't be there and once it begins to crack generally it will continue until the piece is nothing but a pile of shards. So a small crack that shows up during coldworking, generally, means ~$500 down the drain.

The silver lining that brings me back to the airline seat example is that from time to time we have been able to save the piece, and actually sell it for more than it would have been originally worth. Most often the tails crack, if he cuts off the part with the crack it will prevent it from spreading. We will pour a cookie (a pad of clear glass dumped on the marver) and make splashes. When you put it all together it becomes a naturalism and adds ~$1000 profit to what the original would have been. So a piece with a small crack is like an empty airplane seat. The money has already been spent for it to be there. The marginal cost of making a cookie and some splashes and putting some more time in is worth it because the end piece covers all the money and time put into it and is still profitable.

I really like the "Adam Smith would have loved uber" case study. The way Uber challenged the existing market and threw their rules back in their faces. I remember hearing about it when it was blowing up and people were realizing how much it would alter the getting people places market.

I don't know that I have any questions about our economy prompted by this first chapter. It is still enough of a foreign concept to me I don't know what questions to ask. Maybe how much impact exactly I can have?