Pros and Cons of a single currency

There are pros and cons of a single currency.

The advantages of a single currency include more stability for the currency. For example, the currency of euro would be more stable against speculation than individual currencies are now. Another advantage of a single currency includes consumers not having to change money when traveling and so the people would not lose money when exchanging because there are not exchange tax rates. Moreover, for industries within a country would have to deal with the consequences of tax rates when they would be dealing with money. Businesses would not have to deal with currency fluctuations and so they would no longer have to pay for the consequences of that. And additionally, because there would be no costs for exchange rates because exchanging money would not be necessary just like for Europe for example, the whole economy of Europe would therefore not lose money but on the contrary, increase. 

However, there are disadvantages of a single currency as well. For instance, single currencies may lead to pockets of deeply depressed areas in which the people cannot find work and areas where the economy flourishes and wages increase. For example, when a country is going into an economic crisis, it can bring down the other countries with it as well just because they are sharing the same currency. Additionally, there can be loss of national sovereignty as the nations are sharing the same currency.

This article discusses about Spain’s economic crisis. Because Spain is one of the biggest nations in Europe that take part in the Euro union, it affects the other nations when its economy decreases. This is the first disadvantage of a single currency that is discussed in the above paragraph.

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The United States deficits in terms of GDP

United States Balance of Trade

A country’s deficits is when a country has more imports than it is exporting. In other words, the country is buying more than it is selling. The United States has had an increasing deficits since 1980s. The United States have had a growing GDP since 1960 to reach today’s GPD of $14.26 trillion US dollars at current prices.

The above link is about an article discussing trade deficits in the United States as export climb. It is an example of how the USA has had an increasing deficits.

The above diagram is an illustration of the United States’ balance of trade in the past few years.

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My data response reflections

The data response was a good way for us to learn about protectionism and how nations can put barriers on imports in order to support local industries. I think through this data response I was able to know more about it and easily connect it to everyday issues.

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Globalization Debate Reflections

During the debate, I learned many things, not only from my side (negative, which stated that globalization does not encourage a country’s economic growth) but as well as on the opposite side that was positive. I personally believe that globalization is good for a country for it brings internationality and enrichment as there is a different culture and flow of new ideas introduced in the country. However, I discovered several arguments that could go against it as I researched on the negative side. For instance, exploitation and culture washed away were two of our great examples. Because a variety of people are working outside their country in industries whose goal is to produce a big amount of products with a low price and as a consequence, the workers are paid with a very low salary with healthy insecurities and so on. Additionally, countries’ cultures are washed away as foreign cultures and ideas are introduced in the country and eventually blend in with the original culture. I believe those two arguments were quite effective. 

Nevertheless, I think the opposite team had very good arguments as well including the introduction of better ideas from the foreign countries into your country. For example, for myself, an International student living outside her homecountry, am able to maintain the comfort of wearing my own clothes in a foreign country so I would not have to wear an uneasy outfit such as the kimono in Japan. Also, the opposite team put emphasis on specialization and as a result, countries are able to trade with each other to bring out the goods they specialize in as they both have the least opportunity costs when producing that particular good. Free trade among nations enrich their culture and GDP as a whole.

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Free trade vs. Protectionism

Free trade is when the freedom is given to countries to trade across their borders. Protectionism, on the other hand is a way to restrain trade between states or countries, through methods such as tariffs on imported goods, restrictive quotas and a variety of government regulations designed to discourage imports, and prevent foreigners to take over domestic markets and companies. In order for a country to know whether they should specialize is through the calculation of comparative advantage which can be defined as one’s ability to produce a good for a low opportunity cost.

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Tariff, Quota, Subsidy

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Danger Zones

Looking back at my previous assignments from last year, I realized that my three danger zones include lack of diagrams or poor use of diagrams because sometimes, the diagram was wrong and did not correspond the particular article review I was writing about. Furthermore, poor time management is another danger zone I encountered last year in data responses especially on part D’s because that was the last part which required the most writing and I certainly did not plan that ahead one time. Lastly, another danger zone I faced last year was ineffective evaluation in data responses again, for my evaluations were not correct as I mentioned wrong theorems according to the articles given to us.

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Tax cuts article review

This article that I got from the sharing website of Diigo discusses about whether to extend the Bush tax cuts. If one earns more than $200,000/year, he or she is considered “rich”. The crows who is in the category of “rich” people, belongs to the top three percent of the population. Therefore, the article mentions that by raising their tax to everyone for a little, will not harm them too much financially. 

Nevertheless, the article mentions a small detail which is how the top one and second-highest bracket of the population of the United States pay the same tax percentage despite of their different incomes. As a result, the “rich” people complain saying that it is unfair considering the fact that they are not given the privileges they think they deserve. 

The diagram below shows how the United States is not showing the straight Lorenz curve thus, not meeting the equality line. 

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Tobacco, taxation and fairness

The article “tobacco, taxation and fairness” talks about smokers having to pay taxes everytime they buy a pack of cigarette because the health care costs of treating smoking-related medical conditions is shown to be quite high. However, the question lies upon whether particular taxes are fair and whether they are justifiable. The diagram below illustrates progressive, regressive and proportional tax.

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Presidents’ Dilemma Reflections

In this project, I was able to learn about economics and its concepts in which we can apply today in our own life. I think this was a good way to get us mature about economics today. Personally, I believe what we learned was relevant and even more than all the microeconomics concepts we learned earlier because we can actually apply this to our current life. 

During the presentation, I felt like Bobby’s presentation was great and well went through all the different aspects of our “President’s Dilemma” presentation. When the questions came, I felt really comfortable and answered a question about unemployment rate and analyzing it in comparison to historical facts.

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