Introduction
Economics surrounds daily interactions that exist between scarce resources and unlimited wants. Everybody in an economic setup has limited resources that are needed to satisfy whatever he or she wants. As a result, they tend to achieve the unlimited wants using the available resources within their reach. The essay elaborates four key points namely market economy, regulations and laws on economy, economic decisions, and pricing of goods with respect to the market structure of the USA (Selwyn, 2014). These four key points are derived from the article ‘Prediction: Economic Collapse, Civil Unrest in America by 2016’ by Selwyn in 2014.The paper will also elaborate how current market systems have affected the USA economy.
Key points Relevant in Economic Newspaper
The first key point in economics is a market economy, a setup where people and private enterprises make decisions on matters concerning the production and utilization of products (Mitry, Smith, & Matula, 2014). Most enterprises under market economy reap high profits since they design unique production techniques, which are cheap and self-sustaining. For instance, the US can be categorized under market economy. A case is seen in the journal where banks escalate money prices that have led to inflation (Mitry et al., 2014; Selwyn, 2014).
A price level is the second point. It indicates how lowness or highness of the prices of commodities in the market within a given period. The price levels, especially in the oil and gas sector, have been noted to drop in the recent past (Mitry et al., 2014). Although a fall in prices is noted in gas and oil sector, market economy of the US still faces inflation since the private banks provide their monetary rate irrespective of the existing governmental regulations. As indicated in the article, an economic collapse is predicted due to such financial activities (Selwyn, 2014).
Regulations, decisions, and laws that are made in the private sector and/or the government affect business activities (Selwyn, 2014). Such laws and decisions fall under microeconomics. They elaborate the quantities and prices of commodities and services in a particular market. Furthermore, they deal with government regulations on taxes, prices, and quantities of products that are in the market (Mitry et al., 2014).
On the other hand, macroeconomics deals with economic systems at the national and global levels. Its main objective is to elaborate the acceptable price levels, national income, employment strategies, and production systems (Selwyn, 2014). It also provides information on the government taxes, price levels, and spending in a given country (Mitry et al., 2014).
Market Structure as a Concept of Economics
The organization of a given market based on its characteristics is termed market structure Baldwin & Scott, 2013). The structure of a given market ensures that both pricing and competition exist. Furthermore, it lays emphasis on market shares that are captured by the existing businesses (Baldwin & Scott, 2013).
Effects of Market Structure on the US Economy
The regulations and competition that are present in a given market can have both positive and negative effects on the national economy (Syverson, 2004). For instance, competition ensures that businesses achieve high prices for their goods. Such enterprises get high profits due to the barriers that are created to control market entrants and competition. When lower barriers exist, enterprises that are more new establish in the market thereby bringing about intense competition (Baldwin & Scott, 2013). For example, the USA has a market economy with lower barriers to new enterprises. As a result, competition is exhibited in the market setting (Baldwin & Scott, 2013).
As indicated in the journal, prices keep on shooting up due to individual decisions and frequent printing of money. This situation has adverse effects on the US economy since more banks determine their monetary values. In this case, price inflation occurs (Selwyn, 2014). Contrary to the above statements on the inflation of prices, it is noted that the global economy swift from low to high levels may result in the worsening of the US economy (Mitry et al., 2014). It is clear that financial and structural instabilities also exist in Europe and other upcoming economies such as China and India (Mitry et al., 2014). Current statistics show that the economic freedom score of the United States has dropped from 76.2 in 2015 to 75.4 in 2016 (Mitry et al., 2014). This situation is a clear indication that the regulatory burden of the country continues to increase with a view of regulation the international economy.
Conclusion
As revealed in the journal, the US economy has been hitched by various factors such inflation. Although the journal presents a prediction of an economic collapse, it can be said that the US government strives to counter various factors that can affect it economy adversely. There is also a plan to ensure that the economy remains stable through the establishment of regulations on most commodity prices. As a result, many businesses have complied with such regulations to ensure that they avoid losses. Furthermore, firms in the US are striving to innovate with a view of introducing new products that will most likely offer profitable opportunities in the international market.
Reference List
Baldwin, W., & Scott, J. (2013). Market Structure and Technological Change. Web.
Mitry, D., Smith, D., & Matula, T. (2014). Reconsideration of Globalization and Free Trade: Imperatives for Changes in Economics, Business, Political Science, and International Relations. ASBBS Proceedings, 21(1), 469.
Selwyn, D. (2014). Prediction: Economic Collapse, Civil Unrest in America by 2016.Web.