Epilogue

The epilogue of naked economics raises some interesting questions about life in 2050. One of these questions asked if we would use markets in an effective manner to solve social problems. At first I thought yes because that is what it seems like we have been doing with the market thus far but the education system example states that good teachers aren't payed more than bad ones and there are no real rewards for the schools students that do well or punishment for under performance. Perhaps to improve education schools must be rewarded or punished based on their students performance in order to improve the quality of not only the educators but the students as well. Just as how the doctors that wouldn't work on curing quite a handful of diseases until it was rewarded if they did so. All I'm saying is that everyone has a price and we need to use the market in such a way to meet everyone's price to the best of our abilities.

Victoria DuBois, Epilogue, Question #6

I liked the part in the epilogue where Wheelan brings incentives back into the book. The question he is asking is "Will we use the market in imaginative ways to solve social problems?" He talked about rare diseases that companies ignored them because they had no funding to research them. So everyone just swept the diseases they didn't know how to fix under the rug. Because there was no funding for these diseases, there was no incentive to figure out solutions. Then in 1983 Congress passed the Orphan Drug Act and it gave researchers the incentive to look and create solutions. Because people think in personal self-interest and so in order to solve social problems, you have to give people the incentives to help.

ShernCarissa epilogue question 6

I thought it was interesting to think about life in 2050 and how much we will work harder for less or to work less for more. For example will we work for 60 hours a week to live comfortably or work 25 hours a week and do something we enjoy like listening to music in the park.

Trenton McCarthy, epilogue

It is all wrapped up in the Epilogue, giving us nice closure to a well informative, interesting book. The seven questions are only some of the questions we as economists should think about when talking about the future. It all points back to one of the most important rules to be and economist: think about the long run and not just the short term benefits. Every decision we make has an effect. Using this book as a vessel, Wheelen has simply provided us with a useful set of tools; nothing more, nothing less. But just like Wheelen writes towards the end of the epilogue, there is no silver bullet for economic theory just like there isn't one for cancer, however, there is only always a chance to improve it. All is takes is a smart economist who was provided with a foundation or a set of tools to make educated, rationally economical decisions.

I have learned that not everyone should have a piece of pie. In America we have to pay for hospital bills and health insurance. This means more people will go with out because these things cost a lot of money. The people under "wackier drive" can't afford it. But if we give out free heart care this will make the unemployment rate will get higher because they can get paid for doing nothing and they won't need money to pay for any hospital bills. Wheel an gives us the choice to choose either the European way or the American way. I would choose the American way because if we gave free health care the unemployment rate would increase and the government would lose money making it not possible for us to have free healthcare anymore and then we are broke. 

Emma Spreng, Epilogue, question #2

The many different issues talked about in the epilogue affect all of our lives in some way. One issue Wheelan wrote about was how to solve social problems. His answer was proper incentives. He used an example of how all teachers are paid the same, therefore that doesn't necessarily mean all teachers are going to try their best at being a great teacher, some will just settle to be mediocre. Wheelans point is that if teacher are given an incentive (more money) to do better, most will then strive to be great.

Anders Chelgren, epilogue, question 2

Long story short, my father grew up very poor. Through hard work and long hours he became financially successful. Now, he makes good money, and has the luxury of purchasing expensive toys. Work can be enjoyable for him, depending on circumstance, but work never truly stops. He is always working in the office, on the phone, checking email ect. Wheelan in naked economics ask questions like, "How rich is enough?" He asks at what time in life will work no longer be desirable. When do we, as people, claim our life back and live for experiences and not a paycheck. We could we break free from what is the most "economically sound" choice and instead focus on whats most benificial to our inner self, family, hobbies, ect. If America becomes more productive will we In fact work less? It current seems like that is not the case. One idea I find interesting is the concept of living for experiences and not a paycheck. Making a hobby more important than financial sucess, choosing to work 30 hours a week instead of 60 so that you may do what you love. If a person is only truly concerned with themselves then yes, I agree people should work less and enjoy more. Yet, if a person has the ability to work harder and as a result help provide better opportunity's for those they love, then I'm not sure. There is defiantly a trade off that must be made between providing the best for those you love and relaxing yourself. 

Rachel Zellie, Epilogue, Question #6

I love how Wheelan ended the epilogue stating he doesn't know how anyone could possibly not think economics is interesting because all of the big concepts of economics stretch into our everyday lives. Since beginning this class in January I have noticed basic ideas of economics being applied in my life everywhere from grocery shopping to interactions with friends. I also really enjoyed reading Wheelan's book especially the epilogue, because he tries to answer some of the larger questions surrounding the economic future but also raises so many more important questions. I thought the most interesting question Wheelan raised was "Will we use the market in imaginative ways to solve social problems?" I found this so interesting because of the constant irony surrounding what Americans do to solve social issues. For example with the education system we try to encourage the importance of education but simultaneously make it difficult for people to become teachers. Or how we never really reward teachers when their students do well or punish them when they do poorly. These are just a few examples of how Americans say they want to fix social issues but usually do the exact opposite. Furthermore, I enjoyed the entirety of the book and this last section has opened a Pandora's box of questions for me to look into.

Bre Kelley, Epilogue, Question 6

Economics is just a set of tools, we must learn how to use them to improve our world.  Americans are richer than most of the developed world, productivity growth may change that statement.  Income inequality is lower, leading to higher employement.  Making it to cheap to travel by car can raise revenue and "green" taxes.  The remarkable thing about economics is that once you have been introduced to the ideas, they begin to show up everywhere.

Andrew Johnson, Epilogue, Question #2

The main effect that Wheelan has highlighted in his epilogue is the idea that there are so many questions that appear when more and more economic policies and theories form. He also brings up a few questions and problems which will affect me directly as I approach age 53 in 2050 such as the role of Social Security and the implications of my tax money going toward the Baby Boomer generation. Wheelan also proposes questions regarding incentives which is a timeless problem which must be focused upon in order to minimize the augmentation of more unmotivated people in the future that lies ahead.

Anders Chelgren chapter 12 question 7

I found chapter seven interesting. Wheelan makes the claim that trade barriers are a tax. He states that by imposing government import taxes competition is lost thus farmers can charge more for their products. It is simple supply and demand, by adding tax on imports, the supply imported decreases thus the remaining product has higher demand. By protecting special interest groups politicians make friends and appear to be major advocates of the people despite the true economic effects of their decisions. This orange juice example is different but still similar to subsidizing the Moher farmers. As a general statement the less government involvement the better, including in trade. Free trade is true capitalism. The one exception I can immediately consider is for vital recorces. Hypothetically, If we as a country decide to import 95% of our food we would no longer need to have any farmer subsidies and could likely have food grown far cheaper due to the low labor costs in other places. Yet should we? Using this same annology again consider an issue, catastrophe or war breaks out. If importation is impossible due to a naval blacked like the civil war or even a trade embargo like Cuba could we survive? I don't know I am nearly weighting the options in my head and still thinking of a conclusion. 

Anne Warnke Chapter 12, Question 2

Yes of course, this whole chapter effects nearly everyone living in America, in most of the countries on the planet. This chapter really makes you wonder just how far the effects of globalization affect our lives. It's hard in most situations to be able to point to something and say without a doubt "that was not traded from a foreign country" and probably harder to point and say you own something without having traded it, and made it with your own hands. With the growth of both our countries and those we trade it, unless another world war happens, it is almost certain trade and globalization will continue dominate our everyday lives.

Carissa Shern Chapter 12 question 6

I found the passage about the Brazilian orange juice vs. Florida orange juice very interesting in the fact that the US government makes the Brazilian oranges more expensive by putting a hidden tax on the juice and sending the extra money to the Florida orange farmers.  All the while letting Brazilian land perfect for citrus go to waste because of the hidden tax.  I think the US government means well but it is not right to make Americans pay up to 63% more for orange juice just to subsidize these Florida farmers.

Drew Hanson, chapter 12, question 6

The most interesting example, to me, in this chapter was the example of how silly protectionist theory is that had to do with the Mississippi River. As far as trade is concerned, the Mississippi is just as arbitrary a border as any country border is. The example only appears obvious because we value both sides of our country the same and it's obvious that we are getting bad deals both ways by cutting ourselves off. People should think of the world, and people, more globally.

Victoria DuBois, Chapter 12, Question 6

The part in chapter 12 that I found the most interesting was on page 284 as Wheelan explains in a small paragraph or so that there isn't an example in modern history of a country developing successfully without inter grating themselves into the global economy. In the paragraphs leading up to this fact, Wheelan talks a lot about India and China and how each of them would not have as strong of an economy if it were not for globalization. This is interesting to me because although I knew that globalization was important for many economies, I have never thought about how in order to have a truly successful economy, there has to be globalization.

Tyler Coughlan, Chapter 12, Question #6

The passage I found most interesting was in the section where he quoted Abraham Lincoln wanting to make railways here and keep the money here instead of buying it from England. Wheelan found a fallacy in that argument is that it would be a huge waste of time. England already has the railways perfected. We need trade because it would be difficult for us to leave if we had to make all our clothes food, house etc. We can use absolute advantage where countries do what they're best at and that improves everyone's quality of life. The oppurtunity cost of tiger woods doing auto repairs is a gigantic failure of skills available. "Productivity is what makes us rich. Specialization is what makes us productive. Trade allows us to specialize" (275). Trade makes people better off.

Emma Spreng, Chapter 12, Question #6

The main focus of this chapter are the benefits of globalizations. I found the passage about the girl who works in the factory for $2 a day interesting because her father says he really hopes she won't lose that job, when she is at times getting needles poked through her hands. This passage really highlights how globalization works. An american company put a factory in Bangkok, only paying their workers $2 a day, when here nobody would work for that little. But in Bangkok, because their economy isn't as good as ours, that $2 a day is great.

Bre Kelley, chapter 12, question 6

Trade, like technology, can destroy jobs, particularly low-skilled jobs.  If a worker in Maine earns $14 an hour but in Vietnam it can be done for $1 an hour, the firm will most likely chose Vietnam.  Poor countries lose jobs, too.  Industries that have been shielded from international competition for decades, and have therefore adopted all the bad habits that come from not having to compete, can be crushed by ruthless efficient competition.  Thumbs-Up Cola in India was overridden by Coca-Cola when it entered the market in 1994.  Therefore smaller companies across the world can be put out of business by major corporations internationally, by globalization and competition.

Rachel Zellie, Chapter 12, Question #3

One of the topics Wheelan discussed has a major implication on our futures and the future of economies. Wheelan discussed that free trade creates losers which causes negative and positive effects to arise. Because of creative destruction many jobs are lost to those who can be paid cheaper to do it or to s robot that is far more productive and less expensive. In the short run the idea of creative destruction has a negative effect on those losing their jobs. This situation becomes more negative when you note that the economy created around 200,000 jobs (1990-97) but many of the 37,000 unemployed people remained unemployed because of their low skill level. The competition created by free trade only creates positive effects in the long run. In the long the positives consist of the growing economy absorbing displaced workers and exports raise making consumers richer through cheaper imports. Overall trade creating losers is a positive thing in terms of the long run but that doesn't minimize the human pain and disruption of the present workers becoming unemployed. I really thought the quote Wheelan inserted from Mark Twain summed up most people's opinion regarding free trade competition. "I'm all for progress; it's change I don't like." (277)

Andrew Johnson, Chapter #13, Question #3

Development of economies is based on the notion that competition drives growth. Being that less sophisticated economies usually are paired with underdeveloped countries due to the resources the region provides, the importance of human capital is stressed by Wheelan in order to improve the well-being of underdeveloped countries. Economies are also heavily dependant on the country's status of trade, which allows for the employment, investment, and inclusion of human capital, improving the quality of life as trade strengthens.

Anne Warnke Chapter 13 Question 7

Reading this chapter was helpful to me understanding my recent vacation as I traveled on a cruise to tropical locations far from perfect in terms of development. My parents were shocked to see this, though I knew it was coming, but there were tons of times we would be driving through a city, Rotan, or Belize city, and you could see how much the country was struggling to keep up with the modern world. While you can give due to these cities geography as part o the reason globalization has been harder for the country, I would also contest the tourism of richer countries is also a positive and negative to the globalization of third world countries. One part, the cruise lines and hotels bring in foreign economies into the mix, and bring a need to renovate and update the cities in order to bring in tourist. This can benefit the countries, but as more tourist come and the entire system becomes on serving tourist, money gets spent toward improving tourist hotspots rather than actually helping the country.

Chelgren, Anders, chapter 13, question 6

"Excessive regulation goes hand and hand with corruption" I found the passage interesting regarding the link between high government regulation and corruption rates. I think it's only natural that people in power, with little accountability, will abuse their power. It's no secret that power corrupts and absolute power corrupts absolutely. By creating unclear laws and setting up many hoops to jump through, governments slow economic growth. Just like in the given example about a clothing stall, people cannot afford to waste their finances or their time following the proper legal channels forcing them to choose between bribing an official and not having a store. We are fortunate in America to have a accountable government. We need to protect this by limiting government regulation to only where it is totally necessary. Also, transparency and accountability between officials and the public is important for economic growth and personal freedoms alike. 

ShernCarissa Chapter 13 question 6

I found the part about how natural resources don't make a country prosperous very interesting, the example of Angola was especially interesting Angola makes 3.5 billion in oil profits yet, a third of their children die before their fifth birthday. 1 out of 133 people have been harmed by land mines.  The government spends it's money on weapons for their civil war, so much so that in some parts of the capitol do not have electricity, running water, sewers, or garbage pick up. There is not lack of funds in Angola but, a definite lack of priorities by a government who chooses their arsenals over their people.

Betsy Elliott, Chapter 13, question 4

in the beginning of this chapter Wheelan bring up the issue about how 2 billion people in the world live on $2 a day. Throughout this entire semester I have wanted someone to answer why this has happened and why we aren't doing anything about it. This chapter Wheelan gives us an answers. He says the reason so many people are poor is because their economies have failed them. The poor economies are not creating wealth by taking inputs, including human talent, and producing things of value. And example of this is Pakistan. They spend all this money creating weapons and building bombs but the don't even use any of that money to cure a curable disease in there nation like measles. I love what William easterly said, " wonderful people, terrible governments". Wheelan says there is not a way economists can make poor countries rich.

Trenton Mccarthy, chapter 13, question 6

Chapter 13's topic was on the wealth of nations. There are many factors that play in the development or downfall of a nations economy. One of the more interesting factors was "excess regulation." When things get bad, trying to fix things by taxes and laws ( like in Moscow with Article 575 and 615) could may as well be a detriment. Regulating is definitely not the answer. Another interesting factor was openness to trade. I couldn't help but thing of Ancient China. When the tried to close their nation off from the outside world, their economy fell. Falling behind industrial and agriculture advances set them back, causing a great city to go into the hole. With all these factors that Wheelen mentioned, I thought about the United States. The reason we have been so successful as an economy is because we generally do most of these factors well.

Tyler Coughlan, Chapter 13, Question #6

This chapters main focus was on the wealth of nations and how they were distinguished based on their economies and the different aspects of their economy and what areas a countries economy would thrive in or get destroyed in. The most interesting aspect for me that I never thought about before was geography. All the great economies are far away from the Tropic of Cancer line and Tropic of Capricorn like Europe and America. Ones that are near the line are central and South America and Africa. I always thought the tropical countries would be doing fine because of lots of tourism but in those areas the" high temperatures and heavy rainfall are bad for food production and conductive to the spread of disease. Those are huge problems for an economy that I didn't fully realize those countries suffered from until now.

Bre Kelley chapter 13

Large deficits require the government to borrow which leads to large deficits.  This leads to higher taxes, inflation or giving up on debt.  Debt is the money spend that a government has not paid back but deficits are the money they have borrowed that they have also not paid back.  Much of the world is poor because rich countries haven't tried to reverse it.

Victoria DuBois, Chapter 13, Question #6

The passage in this chapter that stuck out to me was the subject of women power. Within the part of women power Wheelan starts by talking about Saudi Arabia and how when Bill Gates was talking technological progress with people there, most of the room was men while the rest were woman. The men and women were segregated and the women were wearing black cloaks and veils covering their faces. When asked if it was realistic for Saudi Arabia to say that they would be in the Top 10 countries in technology by 2010, he replied by saying "Well, if you're not fully utilizing half the talent in the country, you're not going to get close to the Top 10. Earlier in the passage Wheelan talks about two farmers having the same amount of land but the one farmer only uses half of it while the other farmer uses the land fully so obviously the second farmer is going to produce more. So I think it's interesting how Saudi Arabia wants to meet exstensive goals, but refuse to let the women help, and by doing that they're holding their country back.

Chapter 13 Question #6

In the reading of chapter 13 about development economics, it was interesting to learn about some of the economic policies and institutions that were put to work in other countries and the United States. A real world application that was almost scary to think about to me was that 2 billion people around the world live on less than $2 a day. When I thought about what it would be like if I had to live on $2 a day, there seemed to be no option but to starve myself simply because I do not have the budget in this scenario to eat every day. I guess I am just to used to society and city living that I often forget how good I have it in this world . Especially compared to those in developing countries. The real world application of having to live on $2 a day is just to much for me handle. I guess We should just keep living our city lives and remember how good Most of us have it!

Rachel Zellie, Chapter 13, Question #6

After reading chapter 13 there was one specific passage regarding government institutions that threw me for a loop. Wheelan was discussing different policies that make the difference between the wealth and poverty of nations one of which was effective government institutions. Wheelan mentions that settlements such as the United States gained institutions that had a positive long-lasting effect on economic growth because these colonies were easy to live in (longer lifespans). In contrast settlements in the Congo did not gain any long lasting institutions because of how difficult it was to live in that area. The settlers sole focus was to extract as much wealth from this colony as possible without spending too much time there. Comparing and contrasting these two different colonies put into perspective how important the actions of the past really are to our future. This example also portrayed how country's economies are affected by outside variables that are not strictly involving the economy. Overall this section produced an "ah-ha" moment for me because if the British had decided against developing in the United States we could have a vastly different or weaker economy.

Andrew Johnson, Chapter 12, Question #7

What I have learned from this chapter is why trade is (and has been) emphasized when it comes to economic development of countries. The fact that humans are out to improve their way of life and look to one another for goods and services in order to maximize productivity is clearly demonstrated by Wheelan through many examples. The idea that protectionism has also come to light as being a hindering force of future growth for the perseverance of the few. Wheelan also points out the weight of environment on the importance of trade, such as sweat-shops in Asia have allowed those countries to grow and raise the standard of living and the environment.

Chelgren, Anders, chapter 11, question #6

The passage that I found most significant is the one about goods and services. I was amazed to realize that "in a modern economy more than three quarters of goods and services are non tradable." Wheel an uses haircuts as an example. Haircuts have a benifits to individuals however their purchasing power is relatively universal. A haircut is a haircut no matter what part of the world your in. Therefor, trading a haircut in America for something else in another country is not very beneficial to the world economy. This is why goods can be easily traded internationally, while most services must happen is a local enviornment. 

Anne Warnke Ch. 11 Question 7

I've always loved learning about the currencies of other countries, and understanding exchange rates ever since I went to Europe and actually experienced using other countries money. What this chapter brought to light, the thought I'd never actually considered, was that exchanging money and the exchange rate itself, is all just a business transaction. It makes perfect sense though, countries agree to exchange an amount of money for a good which, in this case, is money. I also see a danger to the process of exchange, for instance, if a country suddenly decided that the fixed rate isn't enough, that PPP doesn't accurately agree to their terms, the process can be all thrown out of whack. It also makes you question all the basic things in your life that can be viewed as business exchanges.

ShernCarissa, Chapter 11, Question 6

I have always wondered how the US was so strong but yet had such extreme debt, I found the example of the farmers: Farmer America and Farmer China.   The most interesting because it just shows how ridiculous and symbiotic the relationship between the two countries are.  Because China allows America to get keep on borrowing and borrowing fund and giving China IOUs.  That debt has now gone beyond a trillion dollars.  Why is China still giving the US so much money when the US has nothing to give them back because we use all of our own resources?  When will we end this unhealthy relationship?

Betsy Elliott, chapter 11, question 6

This chapter brought up some memories from my Sweden trip I went on with a Swedish girls choir. I used to be in a Swedish girls choir and every three years they would visit Sweden. One year we went and when we got to Sweden we need to change our currency so we went to a machine and it did it for us. In America I knew what a dollars value was and what I should be able to buy with it, but I didn't know with the Swedish currency. Since I was about ten years old I didn't really care, so I would spend my money on ice cream at every gas station not knowing buying it was equivalent to a five dollar purchase back home. I wasn't "stolen" from like Wheelan was when he went to China but I've always wondered why the entire world doesn't have the same currency to make everything some much easier.

Drew Hanson, question 7, chapter 11

Before reading this chapter, I had understood currency as being one general force throughout the world and each different kind of money was just another color of the same creature. After reading the chapter, I understand that each currency is very independant of the other forms of currency. 

Something else that gave me a new perspective was the subjectivity of the value of currencies against each other and how governments can "defend" their currency by buying a bunch of it with other currency, artificially raising the demand. Can't really be that easy? 

Trenton McCarthy, question 6, chapter 11

The weakening of the dollar and the strengthening of a dollar both have the possibility of drastics changes in a countries economy and the business of importers and exporters. Wheelen gave two examples, one for each side. When the dollar weakens a New Nork Times began stating that as the dollar declined so did the worlds wealthiest economy. On the other side, when the dollar strengthens people claim that it may be too strong. When the dollar was equivalent to 90 yen in 2001, Toyota earnings dropped by 450 million dollars just like that. The best place for the value of a dollar is right in the middle but that may never happen therefore stability is the goal. Now government officials might purposefully manipulate the currency to aid the economy or the opposite effect could happen to complicate things even more. Consumers would be taxed on every import they buy... Essentially having detrimental effects on the importer as well as the exporter.

Andrew Johnson, Chapter 11, Question #3

Purchasing Power Parity is an fair concept of currency comparison and are very influential to the global economy. Being that currency is worth only how much people trust it to be worth and that currency's value is determined by the quantity of currency associated with goods, global currencies must have a system of comparison in order to maintain trust/value of goods and services. However, PPP isn't always able to assure fair exchange between currencies. Due to certain goods (such as nontradable goods) not being able to be compared appropriately by PPP, the value of currencies can be 'undervalued' or 'overvalued', causing a perception of depreciation to arise within the currency, resulting in a weakening of trust for a currency, which may induce a feeling of recession for such currency dependent country's if not adjusted accordingly.

emma spreng, Chapter 11, Question #6

I found the passage about the Big Mac interesting because before reading this I never really thought about the price differences in different places, such as China and the Unites States. But when Wheelan brought up this example it stuck out to me because McDonald's, an american company, is selling there food all over the world and I would have guessed that it's sold for the same amount no matter what the currency is. But because China's government "rely heavily on a "cheap" currency", the Big Mac is cheaper in China.

Bre Keley chapter 11 question 6

Major economies need to recover together.  Any sports game is a zero-sum game, in which a team gains from other teams becoming weaker.  International economics is the opposite.  Global GDP has grown for centuries, we are richer than we were in 1500.  No one got poorer, we collectively became richer.  The goal of economic policy should be to make it easier for nations to cooperate with one another. Netherlands better the US does, the richer and more secure we all become.

Tyler Coughlan, Chapter 11, Question #7

I learned a lot more about the exchange rate in this chapter. I already knew that it was the equivalent  amount of goods you can buy in two different places using monetary value. What I didn't know is that when a dollar is strong or weak it can affect companies that have branches in other countries and can affect their sales based on the exchange rate. If a country is going through inflation and it's dollar is worth more people from other countries can make profits on it.  I found the example in the book of the man in 1992 that made a bet against the British pound and became a billionaire in one day to be very interesting and informative that you could make money betting on a currency to lose value. It was interesting to learn in this chapter how a currency could lose value Nd it can affect so many aspects of the international trade and essentially economy.

Rachel Zellie, Chapter 11, Question #6

I have never understood why there are so many different currencies in this world. I also have never understood how the dollar can be "strong" in comparison to the peso and vice versa. This chapter was overall interesting because it started to clarify why there isn't on set currency for the entire world. Chapter 11 also helped me to understand why when exchanging dollars for pounds one dollar may equal four pounds. I also very much enjoyed the section that discussed the gold standard because I remeber learning about it last year during APUSH, but after hearing it alluded to many times throughout this semester I relaized that what the gold standard was and did may have slipped my mind. Overall two of my biggest questions regarding money, how one currency could be stronger than the other and what exactly the gold standard was, were answered through Wheelan's writing.

Andrew Johnson, Chapter #10, Question #6

What stuck out to me about this chapter was the complexity of the inflation and deflation and the methods of controlling them. Wheelan provides examples where inflation can come about the government printing off to much money, the government encouraging certain consumption practices, or the populous just reacting to an event somewhere in the world. Being that inflation and deflation are such complex in nature  and are major influencing factors of trust/reliability for all people, Wheelan effectively communicated the importance of the fortification of equilibrium between the two.

Anders Chelgren, Chapter 10, #6

The passage that was most interesting to me, and most significant to my future, would be the one on the true value of cash. Dollar bills are no longer backed by the gold standard and thus the value of a piece of paper lies only in the belief of the whole that it holds value. The dollars value is entirely dependent on the fact that buyers and sellers know they can exchange the paper for product, "Purchasing power." While cash is important to possess for simplicity of trading I was glad to have read Wheelan's commentary on the fact that cash itself can't be drank, or eaten,  ect. If the faith in the dollars purchasing power failed, the cash people spend their entire lives working for would be worthless and would do nothing to keep them alive. This is why I find major importance in using cash to purchase items with what I am calling "practical value." Things that can be used to survive, thrive, and grow despite the conditions of the generals public faith in the dollar. Some items will always be necessary and if currency fails of becomes overly inflated people will still be willing to trade real items for practical goods.

trenton Mccarthy, chapter 10, question 6

Belief and trust are the backbone to what currency is worth in every country in this world. Whether it's food, paper money, or other miscellaneous items, belief in the system is what determines the value. Wheelen uses an example that stood out to me having to do with India's faith in its rupees. Even though torn or crumpled bills are legal, in other words banks will accept them, business owners don't accpet them out of fear that others won't either. This then starts a downward spiral eventually leaking into the mindsets of tourists. Another example is US money. We ditched the gold standard many years ago, so basically we are dealing with paper, just paper that is green with a face on it. With that being said, it is now a true statement that value relies on this confidence that people have in their currency. Relying on a belief system just seems extremely vulnerable to economic crashes and other catastrophes which means that the fed is always faced with a difficult task: maintaining the status quo because people can get scared fast. If people get scared about the economy, then people lose that confidence which is ever so essential to what we live our life on, paper money etc. this is why the fed doesn't want to promote economic growth to fast or too slow. Either one could very well have a detrimental effect if our minds, our confidence, and our lack of trust and belief let it

Shern, Carissa Chapter 10 question 6

I found the different examples of hyper inflation very interesting in German marks, Latin America, and Belarussian bunnys.  The German mark hyper inflated to the point where it was more valuable to burn it then to buy wood to burn, a simple newspaper went from 1/3 mark to 70,000,000 marks.  Latin American money was their largest import and the "bunny" not only has a rabbit on the bill but it also "reproduces" like a rabbit.

Tyler Coughlan, Chapter 10, Question #6

A point that grabbed my attention was how the federal reserve has to help the rate of economic growth that doesn't go to fast or too slow. It is a hard job to attain that balance especially with other factors in play. One point was that the economy has a lag and the fed can't see what it's Putin place move into action immediately. That can be trouble because someone might want to increase economic growth more because they don't see economic growth immediately but that could hurt in the long run. Also monetary and fiscal policy create an affect on the economy solely by themselves. In the book Wheelan uses the analogy of the accelerator and the brake in how congress can be applying the accelerator and the fed is applying the brake and vice versa. That causes problems if they aren't in cooperation. I saw this as a interesting point because it makes the job of the people at the federal reserve even harder.

Drew Hanson, chapter 10, question 6

The most interesting part of this chapter, to me, was how important the fed and monetary policy are highlighted by the claim made by Robert Mundell that "Had the price of gold been raised in the late 1920s, or, alternately, had the major central banks pursued policies of price stability instead of adhering to the gold standard, there would have been no Great Depression, no nazi revolution, and no World War II". This seems crazy to me. How can an institution that few people understand just a few people run, be the cause of some of the most dramatic events in history, as identified by a Nobel prize winner? How can policies that have such a huge influence on world politics be so disputed? 

Bre Kelley chapter 10 question 6

The Federal Open Market Committee consists of the Fed chairman and presidents from the Reserve Banks.  If the FOMC wants to stimulate the economy of borrowing, it has two tools.  Discount rate is the interest rate at which commercial banks can borrow funds directly from the Federal Reserve.  That relationship between discount rate and borrowing includes if the rate falls than they can borrow more cheaply but than customers fear the bank was not able to raise the funds on their own.  The second tool is the Federal Funds rate.  If the supply of funds goes up, than banks have to lower their interest rates.  This than brings us to the debate of the Federal Reserve creating new money.

Beau Sjodahl Chapter 10

Chapter 10 touches on inflation in the economy and the "speed limit" that an economy can grow at. An interesting point is that if demand is more than supply than eventually a company starts finding it hard to keep up with their product demands. I found the example of the Chrysler motor company to be interesting. Chrysler produces the pt cruiser and it starts to sell well. People start demanding more than Chrysler can supply and it becomes increasingly difficult to find qualified auto workers for the company. Everything from the labor to the capital starts increasing in price and thus inflation takes over so the Chrysler has to pay more money in wages and materials. It's nice to get an inside look on why the economy works the way it does and to have a better understanding of economics in general