Business Studies Essay Paper on Falling Crude Oil Prices Impacts on US Economy

Economic Concepts

Falling Crude Oil Prices Impacts on US Economy

This article addresses the concepts of the economic law of demand and supply that has seen the prices of crude oil drop over the past few months. The declining prices positively affect consumers and may have positive or negative impacts on some parties or the entire economy.

The recent decline in prices of crude oil, which is the main source of energy in the United States, has an impact on the US economy. As the prices drop, it creates opportunities to those who gain while posing threats to the losers. Energy is a crucial component in the manufacturing industry expenses and also a vital determinant of living standards in the US. With the increased domestic production of crude oil, the prices are still likely to go down in the near future. This will in turn result to reduction in the production costs for manufacturers, hence consuming the largest percentage of energy in the American economy. Consequently, the prices of commodities may fall, to the benefit of consumers.

 According to this article, the United States of America spends more than 8% of its GDP annually on crude oil. A decline in the price implies a portion of investment on crude oil can be transferred to improve other sectors such the education and medical sectors. Changes in production and political stability cause shifts in crude oil prices, however, there are other factors that may affect crude oil price with great magnitudes.  Generally, the decline in oil prices is more likely to have a positive effect on the United States economy.

America Labor Market; the Economy Doesn’t Really Matter

Labor is a factor of production an economics concept discussed at length in this article. Changes in labor supply affects production and consequently the economy of a given country. Various factors for instance recession causes shifts in labor supply. The key players are the production industry, consumers and the people offering services. Labor supply definitely impacts on the entire United States economy as well.

The main idea in this article is that the alarming drop in American labor force participation poses danger to the economy depending on how one views it. Loss of jobs during the recession made many people lose interest in searching for jobs and exited the labor market. As the economy improves, there is expectation that the people would rejoin the labor market however if this fails, the impacts on the American economy may be adverse. A fall in labor supply will definitely have a negative impact on production which can lead to a series of adverse economic effects. For instance, low labor supply implies that production will decrease causing scarcity of commodities in the market which will eventually result to high commodity prices. This will affect the consumers, producers and the entire United States economy. On a different perspective, if labor supply falls, it may imply that people opt for other alternatives that are dependable which may facilitate innovations, an important component of economic growth. Parties in the production sector may be forced to adopt other alternatives as well for example rely on imported labor, which also have economic impacts. In summary, labor is a factor of production and since economic growth relies on production too, shifts in labor supply will definitely have impacts on the United States economy.

The Economic and Fiscal Consequences of Improving US Educational Outcomes

The author of the article discusses how improving education system to enable children from economically challenged background brings about equity over a long time. The economic concept discussed in this case is labor, equity, opportunity cost and economic growth. The key players in this case are the government that is the policy makers and the entire American society at large.

By investing in education and introducing programs that make American children from different classes compete at a somehow common ground with the entire best in the world can improve and secure the future of American economy.  Raising the educational achievement of children from socioeconomically challenged backgrounds to match or compete fairly with children from well off families can help narrow the existing educational achievement gap and result to equitable distribution of wealth in the society. For instance, if children from across all classes obtain same educational achievement, the income gap is likely to narrow and thus promote equitable wealth distribution in the society.

  Besides, with well-educated citizens, the future labor markets look promising cause the quality of labor improves. With improved labor, economic growth is likely to double in the long run.Additionally, equitable wealth distribution in the society promotes peace and stability, which is conducive for economic growth. If this is to be, then it would have a positive impact of the United States economy and the dream of having a society where there is equitable wealth distribution may be realized in the nearing future. In summary, narrowing the socio-economical gap in education has a high opportunity cost in the long run and investing in this is something worth to ensure America economic stability in the future.

On Trade; Obama Right, Critics Wrong

The article discusses the economic concept of international trade and how integration with other nation has economic benefits to the United States economy. Through integration common trade rules can be set with the parties involved thus promote international trade. The parties involved in this case are entrepreneurs, the US government, and the Asian countries that recently signed a deal with the US.

Even though most people criticize the recent move by president Obama to sign trade agreements with Asian countries, it is important to view the economic impacts of the agreement in the end. Trade agreements can promote trust among the involved parties and boost international trade. Integration with more countries also secures markets for the products from the US and also through integration; the country can obtain what may not be available in the country. Moreover, securing a large international market for US products catalyzes massive production because producers have ready and large markets for their products. This in turn has positive impacts on the economy for instance, job creation for citizens thus contributing to economic growth. International trade also promotes healthy competition which brings about high quality products and varieties for consumers to choose from. The trade agreements bring together the involved parties to cooperate towards common better trading relations in the future. The pacific treaty recently signed by president Obama will bring in more opportunities to the United States in the nearing future.In this era of globalization, international trade is a pillar to most economies around the world, and therefore United States expanding its trade alliances with Asian countries is to the benefit of the country’s economy.

How Ignoring Climate Change Could Sink the US Economy

The economic concept discussed in this article is tradeoffs and natural resources. Depletion of natural resources can lead to economic downfall of a given country that greatly relies on the same. The parties involved in this case include the environmental conservatisms personal, the government and the entire society since all depend on the natural resources in one way or another.

As a society, we rely on natural resources on a daily basis and the depletion of these natural resources may have adverse effects on the economy of the country. For instance, natural gas or crude oil is a natural resource that we heavily rely on to run the economy of the country. Imagine a situation where we do not have crude oil due to depletion that results from climate change basically caused by human activities or a situation where we can no longer produce wheat due to changes in climate. These scenarios can definitely bring the economy to a standstill if not addressed accordingly. Addressing climate change issues in an economic perspective requires tradeoffs between economic success and environmental protection. If we forgo the use of some products that are harmful to the environment, we would reduce pollution though at the expense of the forgone product. If consumption of some products is harmful to the environment, then it would be better to consider the opportunity cost of forgoing the product. In this scenario, the opportunity cost of forgoing harmful products to the environment is higher than the consuming the product in the long run. Conclusively, in the long run, climate change caused by pollution can have serious adverse effects on the United States economy compared to other factors that pose danger to the economy as well.

Our Comparative Advantage

The economic concept discussed in this article is the comparative advantage with regard to international trade. Comparative advantage is a determinant of production when it comes to international trade since it promotes specialization. The key players in this are the entrepreneurs, manufacturing industries and the government of United States and other countries involved in international trade.

In a globalized world where trade is increasingly becoming more competitive, the comparative advantage plays a vital role in production. Global production today is divided across the globe and the output has improved greatly. Today, the producers in the United States specialize in production of certain commodities but once the other nations have mastered the production art, the production is then moved to developing nations that offer cheap labor. For instance, producers in United States can specialize in developing software for mobile phone applications, but instead of producing the hardware too, they subcontract a company in china to produce the hardware at a lower cost and thus experience the comparative advantage. Comparative advantage creates room for specialization which is an important aspect of economic growth in any given country since it result to high quality end products. Even though some may argue that comparative advantage impacts negatively on the United States labor market, the advantages of comparative advantage are much greater especially when it comes to promoting international trade. Comparative advantage is actually essential for the United States economic growth as it promotes production too. For instance, if producers cut the cost of production resulting from comparative advantage, the consumers may have the advantage of obtaining products at fair prices and even producers may obtain good profit margin, a motivating factor for more production.

Climate Impacts on Agriculture and Food Supply

The economic concepts discussed in this article are factors affecting supply of agricultural produce in the United States. This affects every member of the society from farmers, consumers and the government as well. Food is a basic need and shortage in supply or changes in supply may have serious adverse effects to the country and its economy.

The article brings to light how climate change would affect the agricultural sector in the United States since agriculture is dependent on weather conditions and consequently affect food supply. The agricultural sector brings in up to 200 million US$ annually to the country’s economy which takes a great percentage in the entire US economy. Changes in weather conditions are likely to affect production and supply of food and consequently affect supply in the international market. In the international agricultural market, the United States plays a key role by supplying over 30% of wheat, rice and corn. Adverse weather or climate changes would definitely cause changes in production and supply of these agricultural produce to the country and the international markets. This implies that the country’s income from agriculture would reduce significantly thus impacting negatively on the economy. Shortage in food supply may result to rocketing food prices which is not a favorable situation for any economy in the world, food being a basic need. Incase weather or climate changes to favor agricultural production, then food supply will increase and surplus can be traded in the international market and increase foreign income thereby impacting positively on the economy. Generally, climate change affect production and supply of agricultural produce and food being a basic need, changes in food supply has great magnitude on the US economy.

Economists Actually Agree on This: The Wisdom of Free Trade

The article discusses the economic concept of capitalism and free trade, how it is favorable for economic growth in a country. The key plays in this are the producers, entrepreneurs and consumers. The government also plays and important role in capitalism. Free trade is a catalyst for healthy trade competition which is healthy for economic development.

Even though some economists criticize free trade, free trade benefits the entire economy of the country and even the international trade. Free trade provides an opportunity to make as much profit as a producer or entrepreneurs would. In such case, free trade promotes innovation and improvement of the quality of products that exist in the market. Free trade also promotes health competition because the producer or the entrepreneurs is in control. Additionally, free trade allows healthy competition and boosts the economy to grow faster compared to a communistic economy. Healthy competition brought about by free trade encourages production and thus creation of more jobs. Additionally, it also provides consumers with a variety of products to choose from to satisfy their desires. With competition, prices for goods and services are likely to be fair with high quality of products. Free trade can also promote specialization, which translates into high quality of goods and services to the market. According to economists, America should only import what they cannot produce and what can be produced cheaply in foreign however, it would be important to increase production activities in the country as it leads to more job creation. Despite the few shortcomings of capitalism, it has great positive impacts on the country’s economy since it promotes production and internationally trades which are strong pillar to the US economy.

Unemployment in the U.S.A

The article looks at income inequality in the U.S, how it comes about and how it has affected the economic, social and political growth of the country and how the issue can be resolved. Income inequality as explained in the article is one of the greatest economic factors with diverse effects in the country, among them being negatively affecting economic growth. The key players involved in the problem created by income inequality in the country are the government of the country because it is the government that makes laws concerning the income of people in general.

The people are also involved in determining the impact of income because it is their attitude towards the income they earn that impacts on the economic conditions of the country.

The impact this article has on the economy of the United States is that it enlightens the key players more on the issues facing the country and what needs to be done to solve the problems created as a result of income inequality in the country. The article also serves to enlighten people more on the problems created by income inequality and the rates of income inequality in the country. It states clearly that economic policies made by the government are very important in reducing the rates of income inequality in the country. There has been an increase in income inequality in the country, leading to dissatisfaction among the workers. This is believed to have been created by difference in academic levels among a number of other factors. That income inequality is a factor contributing to the economic growth of the country is useful in allowing the government and the employers to know how to use this factor to increase productivity.

The Economic effects of Obama Care

Obama care is an issue that was received with a number of conflicting thoughts with some people feeling that it was not for a good course and others feeling that it was important to enable every citizen gain health care irrespective of their financial conditions. The article explains how the Obama care has been able to increase the economic growth in the country. The players involved are the citizen, the government and the health and insurance providers. The government is a key player as it ensures that the Obama care is properly implemented, the citizen are players because they are affected, mostly positively by the Act, the health and insurance providers are also affected by the Act.

The article is important because it greatly shows the importance of the Obama care on the lives of the people and as such on the economy of the country. Among the benefits of Obama care as can be seen from the article include, reducing the amount of money that is spent on health care thus enabling people to invest their money in other more productive activities. The Obama care has also enabled people to take greater risks as concerning employment and their economic situations because their use of money has been reduced.

The ACA act, also known as the Obama care has increased the quality of health care that is available to people in the country, it has thus led to more productivity among the workers. It has caused a decrease in mortality rate and ensured better and more quality life, hence increasing the labor available in the country.  The article is therefore important to help make known the importance of the Obama Care Initiative.

Works Cited

America’s Labor Market. The Economy Doesn’t Matter. http://www.economist.com/blogs/freeexchange/2015/04/americas-labour-market?zid=311&ah=308cac674cccf554ce65cf926868bbc2

Climate Impacts on Agriculture And Food Supply. http://www.epa.gov/climatechange/impacts-adaptation/agriculture.html

Economists Actually Agree on This: The Wisdom of Free Trade. http://www.nytimes.com/2015/04/26/upshot/economists-actually-agree-on-this-point-the-wisdom-of-free-trade.html?ref=topics&_r=0&abt=0002&abg=1

Falling crude oil prices’ impact on U.S. economy. 2015. http://www.chicagotribune.com/suburbs/daily-southtown/opinion/ct-sta-varjavand-column-st-0315-20150313-story.html

How Ignoring Climate Change Could Sink the U.S. Economy. http://www.washingtonpost.com/opinions/robert-rubin-how-ignoring-climate-change-could-sink-the-us-economy/2014/07/24/b7b4c00c-0df6-11e4-8341-b8072b1e7348_story.html

How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways to Change the Tide. https://www.globalcreditportal.com/ratingsdirect/renderArticle.do?articleId=1351366&SctArtId=255732&from=CM&nsl_code=LIME&sourceObjectId=8741033&sourceRevId=1&fee_ind=N&exp_date=20240804-19:41:13

On Trade: Obama Right, Critics Wrong. http://www.nytimes.com/2015/04/29/opinion/thomas-l-friedman-on-trade-obama-right-critics-wrong.html?ref=topics

Our Comparative Advantage.http://www.nytimes.com/roomfordebate/2011/01/18/can-the-us-compete-with-china-on-green-tech/our-comparative-advantage

The Economic and Fiscal Consequences of Improving U.S. Educational Outcomes.http://equitablegrowth.org/research/achievement-gap/

The Economics of Obama Care.https://mises.org/library/economics-obamacare