Economics and Degrowth as the Idea of Voluntarily - Assignment Example

Economics Question Microeconomics is a field of economics, which involves studies of how households, firms, and individuals make resolutions of allocating scarce resources. Microeconomics is the study of the behavior of individual economic units. Microeconomics scrutinizes how these resolutions and conducts influence the supply and demand of services and goods, which determines prices of these services and goods. Macroeconomics is the study of the conduct of the aggregate economy. Macroeconomics scrutinizes various economic issues including unemployment, economic growth, inflation, gross domestic product, and national income and price levels. Macroeconomics focuses on the international and national economic trends. Neoclassical economics pursues economics through means of demand and supply models, which determine prices on the basis of subjective preferences of consumers and producers. Neoclassical economics depends on subjective preferences in determining prices. Question 2 Sustainability is associated to the quality of life in a society. It determines whether the environmental, social and economic systems, which make up the society, are offering a productive, meaningful and healthy life for the current and future generations. Sustainable development is the growth, which satisfies the requirements of existing generations without compromising the capability of upcoming generations to satisfy their requirements. There are three features of sustainable development; economic sustainability, environmental sustainability and social sustainability. Environmental sustainability is described as sustenance of life supporting systems. Economic sustainability is described as sustenance of economic capital. It refers to the maximum amount of revenue, which may be spent without diminishing future consumption. Social sustainability is described as sustenance of social resources. Sustainable growth should integrate these categories of sustainability and employ them in ensuring that development is sustainable. Question 3 There are developments of the new economic ideas in the modern economy. The world economy has experienced various economic conditions and new ideas are evolving, complementing the traditional economic ideas. The following are the alternative economic ideas in the modern economy. First, modern economies are considering shifting from outsourcing to in-sourcing. Economies are encouraging local production to enhance domestic employment. Another idea includes the accessing of wealth of the locals; information and communication technologies are changing the operations of the economy. Through the internet, businesses are capable of exploiting larger markets. As a result, these businesses assist in developing local economies. As a result of the incapability of businesses and governments to create employment, individuals are finding means of creating jobs. Through this, these individuals are exploring means of enhancing their lives economically. Modern economies are aiming at achieving an economic development, which improves the well being of individuals. Question 4 The Great Depression was a financial collapse in Europe, United States and other developed economies around the globe. The depression started in 1929 and ended around 1939. The depression started as a disastrous collapse of stock marketplace prices in the United States capital market. The fall in stock prices continued, and there was a decline in the worth of assets. The decline strained financial institutions, leading to insolvency. The loss of confidence in the economy resulted to decreased levels of demand and production, thus worsening the situation. The global financial crisis started in 2007 with the credit crisis. The loss of self-assurance by the United States investors in the worth of sub-prime mortgages resulted to a liquidity crisis. As a result, the Federal Bank injected an enormous amount of resources into capital markets. The crisis worsened in 2008 when the global capital markets collapsed and became extremely volatile. Consumer confidence declined, leading to reduction in the levels of demand and production. Question 5 Global warming emanates from the emissions of greenhouse gases into the atmosphere. Global warming causes environmental degradation, thus reducing the sustainability of the economy. Businesses have adopted various strategies in order to reduce the impacts of global warming in the world economy. As one of the strategies, businesses have embarked on the enhancements of the business operations through innovation and emissions trading. Innovation enables organizations to lower level of greenhouse emissions emanating from business operations. One of the corporate responsibilities of various organizations is environmental responsibility. Environmental responsibility of the companies demonstrates their commitment to environmental sustainability. Various regulations and procedures have been espoused to address the concern of global warming. Businesses are embracing these regulations and measures, including carbon tax and cap and trade strategies. Power generation plants may adopt a strategy of providing clean and reliable energy. Question 6 There are differences between indigenous ideas and western economics ideas. Indigenous knowledge is the domestic knowledge, which is unique to a society or culture. This information is passed form one generation to another generation. The information is passed through cultural rituals and word of mouth. This knowledge has been the basis for health care, agriculture, conversation, and education among other activities, which sustain the society. The western economic ideas use the Western theories and presume the theory of linear development. The western economic ideas rely on theories, which determine the patterns of production, demand and supply of services and goods. Unlike the indigenous ideas, which are unique to a society, western economics ideas are universally accepted. Question 7 Degrowth is the idea of voluntarily reducing the economic system size, meaning the reduction of the gross domestic product. Degrowth suggests a structure for transformation of the economy to an inferior and sustainable level and method of consumption and production. Degrowth is concerned with finding a transition or path to well being, social justice and ecological sustainability. It entails a variety of activities at the personal and collective level on the basis of modification of principles and democratization of communities. Degrowth is concerned about people instead of technology concluding on the course of societal evolution. It is also concerned about providing meaning to lives of individuals, which is not per se related with noticeable materialism and consumption. Question 8 The modern economy criticizes the core ideologies and assumptions of neoclassical economics. In the last five years, the modern economy have been experiencing economic crisis. This is an indication that the assumptions and ideologies of the neoclassical are starting to unravel. The recent changes of the economic system demonstrate that the neoclassical economics cannot ensure the survival of the world economy. There is the existence of problems of making the neoclassical equilibrium theory well-suited in an economy, which develops over time and comprises capital products. Neoclassical economics is frequently viewed as depending profoundly on complex numerical models, which without sufficient concern whether these essentially describe the real economy. Unrealistic assumptions are among the most general condemnations towards neoclassical economics. Read More