Subject: Business and Management
Topic: MACROECONOMICS
Language: English (U.S.)
Pages: 1
Instructions
Part I What is full employment? Economists disagree about what full employment is and the best policies to achieve full employment Should the US aim to achieve a low unemployment target? List the arguments on each side of this debate. What are the strongest two arguments on each side? What policies are needed to achieve this target? What do you recommend? Part II Imagine you come back to your economics class in the year 2050. How will the textbook describe money and banking? Based on trends you see today, make a prediction for the future of money. Explain why you think this trend will occur and how it will affect the US economy.






Macroeconomics

Part 1

                      Full employment refers to a situation where the level of unemployment is around 0%. At this level, there is no cyclical unemployment or that caused by a deficiency in demand. In other words, full employment is a situation whereby jobs are easy to find. Proponents of full employment in an economy argue that the concept is essential for laborers in the economy to bargain for a fair share of productivity.


                      Another school of thought argues that full employment in an economy is untenable. The proponents of this theory also claim that the unemployment rate has been decreasing steadily over the years. They argue that the reason that people do not notice this decline is due to the increasing number of discouraged workers and those who are marginally attached to the labor force.


                      Discouraged workers are those who have not actively sought work within the last month because they believe there is no work for them or they cannot find a job that suits them. Those marginally attached to the labor force have looked for work within the year but have not looked for work within the last month.   


                      Based on these arguments, the US should aim to achieve a low unemployment target. The government should look into ways of encouraging the discouraged workers and the marginally attached to actively participate in the labor force. Such a move will reduce the unemployment rate in the country. A low unemployment rate translates to a smaller income inequality gap and higher productivity in the country.

Part II

                      Based on the current trends, the whole world of money and banking will be very different by the year 2050. The biggest trend we have right now is granting consumers faster access to their money through improved means of technology. The banking industry is also geared towards paperless banking and paperless transactions. People can now shop online at the comfort of their homes. People can also use their Visa Cards to buy goods and services anywhere across the world. In 2050, chances are that paper money will literally disappear.


                      Banks are also looking for ways to reduce the number of credit and debit cards that people have to carry around in their daily lives. Thus, in 2050, it is very likely that people will have microchips embedded in their hands. These chips will carry all their financial information including their bank accounts. Thus, when making a transaction, the individual passes the chip through a reader and automatically the transaction is paid for and his bank account is debited.