Globalization
Essay Preview: Globalization
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Simulation Overview
The country of Erehwon has just appointed a new president for a new 4-year term. Erehwon is a developing country with economic issues. The population is 30 million and twenty percent of the population is below the poverty level. Agriculture is what Erehwon is all about. The issues facing the economy are the countrys infrastructure, government spending, and the need for private enterprise. The new president faces the task of taking this developing country to the next level by improving these issues.
Effects of Changes in Fiscal Policy
The effects of change were decided in three categories. These are government spending on infrastructure, government spending on education programs for low-income students, and change in income tax rates. When deciding what fiscal policy to use, looking at how to fight inflation, and the anticipated recession, the president makes the decision to decrease government spending on infrastructure and government spending on education programs for low-income students while increasing change in income tax rates. According to the Impact of Fiscal Policy, Erehwons economy will see the most changes with real income and real GDP.
Four Key Points from Reading Assignments
The first important key point is economic growth. Erehwon is a developing country, therefore economic growth is important. Agriculture is very important in Erehwon as its what contributes to the economy. In order for more growth, the president will need to figure out ways to increase employment, reduce government spending, and improve the countrys infrastructure. The second important key point is how to measure the growth. Real Gross Domestic Product (GDP) is what is used by economists. Real GDP refers to the market value of final goods and services produced in an economy, stated in the prices of a given year (Colander, 2004). The third important key point is relates to unemployment. The president must improve the unemployment rate, by increasing jobs in the country. The president must find out why there are so many people not working. The forth important key point is inflation. Inflation means rising of prices. Any government should be concerned because prices can rise at any time and this can cause a major downfall in the economy.
Applying Learned to My Workplace
The main thing I learned from this simulation is in relation to my budget. A not-for-profit healthcare system must continue bringing in revenue, especially when trying to expand services or build new facilities. If we are not bringing in the revenue we cant buy new equipment, hire new staff, and/or build new facilities. We still service the same number of patients, but do so struggling most days. Like the president of Erehwon, the leaders of the hospital must come up with a strategy to earn revenue to purchase new equipment and build new facilities.
Growing Further Results
2xx6
Current
Projected
Government Spending on infrastructure (US$ in million)
2.09
Government spending on education programs for low-income students(US$ in million)
1.23
Change in income tax rates (%)
-0.05
Real GDP (US$ in billion)
39.70
40.60
Inflation (%)
5.00
Unemployment