BUS5POE: Macroeconomic Policy Application and Trend Exploration

This BUS5POE assignment delves into the exploration of long-term macroeconomic trends and real-world policy applications. It begins by defining and differentiating key economic terms such as human capital, physical capital, and labor, highlighting their roles in economic production. The assignment then addresses the issue of climate change and its impact on agriculture and animal life, followed by an analysis of free-market pricing mechanisms and their potential to prevent resource depletion, using wood as an example. The concept of diminishing returns to capital is discussed, with examples from India and the USA illustrating its effect on economic growth. Further, the assignment examines infant mortality rates in Singapore, Sweden, Venezuela, and Brazil, analyzing trends and potential future implications. It also explores the relationship between electricity production and CO2 emissions. The United Nations' goals, including poverty eradication, education, child mortality reduction, and environmental sustainability, are evaluated, along with suggestions for additional goals such as gender neutrality and universal internet access. Finally, the assignment connects economic theories to policy by discussing factors influencing economic growth, the limitations of GDP as a measure of economic well-being, and the importance of environmental sustainability. The assignment concludes with critical thinking and reflection on the role of central leadership in macroeconomic performance, questions about increasing GDP growth rates in developed economies, and a reflection on the impact of capital and GDP growth.

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PRINCIPLE OF ECONOMICS
REAL-WORLD POLICY APPLICATION NO 2, BUS5POE

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Table of contents
Part 1..........................................................................................................................................3
Part 2..........................................................................................................................................3
Connecting economic theories to policy....................................................................................5
Critical thinking and reflection..................................................................................................5
Reference....................................................................................................................................6

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Part 1
1)
All these terms are a form of unit that that goes in to the production in economy. However,
while, the human capital refers to the knowledge and the skills of the workforce as a whole,
the labours are the human effort that goes in to the production (Afolabi, Bakar & Aziz, 2016).
Physical capital is a totally different input which is mainly in the form of machineries.
2)
The main issue of the climate change is the reduction in the productivity of the agricultural
sector. Apart from that, the life of the animals in the earth is also influenced due to the change
in the climate.
3)
Free market has the capability to change the price as per the demand and the supply of the
wood in the market. More delectation rate would reduce the supply and the price would go up
leading to a decrease in demand and hence a low rate of depletion. However, in the real
world, the price for wood does not reduce compared to the demand and hence resource is
depleted.
4) The diminishing returns to capital are the reduction in the productivity of the capital as the
amount of capital is increased (Baumol & Blinder, 2015). This is also the reason behind the
fast growth rate of the poor economies compared to the developed once. For example the
growth rate of India is more than the growth rate of the USA. The economy of the USA has
reached a high level of GDP and hence the growth rate is low.
Part 2
5)
a) The reduction in the infant mortality rate for Singapore is steeper than that of Sweden.
However in the case of Venezuela the reduction in the infant mortality rate has been
haphazard as the reduction has been more after the year 1979. In the case of the Brazil, the
reduction was slow at first and after the year 1980 the reduction accelerated.

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b) The main trend is the reduction in infant mortality rate over the years. This is mainly due
to the fact that medical science is improving. In The future the infant mortality rate can
reduce even further leading to an increase in overall pollution.
c) Electricity production and the emission of CO2 were chosen for the study. As per the
analysis of the data, the variables are positively related to each other. In other words, as the
electricity production raises the emission of CO2 increases .
6)
a) The goals are,
 Eradication of poverty
 Primary education for all
 Reduction in the child mortality
 Improvement of the mental health (Mizuno & Kinoshita, 2017)
 Enhancement of the environmental sustainability
b) The achievement by UN has been different for different goals. While the goals for
reduction in the child mortality have been achieved, the eradication of poverty has not been
achieved.
c) The more goals of the United Nations can be the establishment of gender neutrality in the
society and access to basic internet to all the population of the world (Venkatesan, 2015). The
basic internet access has become an important requirement for the modern life and the gender
neutrality is important for the overall development of the society.
7)
a) How can the United Nation initiate in order to make internet accessible to all the
population of the world.
b) In the real world situation i would improve the human capital of the workforce of my
organisation in order to increase the productivity of the overall organisation. In addition to
that, i will also appoint labours as per the marginal contribution it will have on the overall
production of the company (Wyplosz, 2015). This way the organisation would also be able
to reduce the cost of operation as well.

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Connecting economic theories to policy
1) The professor states that, the growth of an economy is depends on a lot of factor such as
productivity of the workers, capital investment, natural resources and many more. The GDP
growth of chine will reduce some day or the other due to the diminishing returns to capital.
Apart from that GDP is not a good measure of economic wellbeing due to the inequality
associated with it. The government, thus, not only have the objective to control the inequality
and unemployment it also have to take care of sustainability. The interest of the environment
needs to be included in the decision making in order to improve the economic sustainability.
2) The profession states that the population of the world has increased over the time due to
the fact that the infant mortality rate has gone down over the years. The emergence of better
medical facilities and a cleaner environment is the reason for the overall reduction in the
mortality rates.
3) The GDP is not the best measure of the well being of an economy as it does not include the
population. With the increase in the population, the GDP may increase without benefiting the
people of the economy. Therefore the GDP per capita is the best measure of the economic
well being of a country.
4) The long-term prosperity of a country is determined by the possession of the natural
resources (Zapalska, Jackson & Zelmanowitz, 2016). The natural resources increase the
wealth of the government and hence the productivity of the economy goes up leading to a
high economic production.
Critical thinking and reflection
5) The statement that, the lack of decision from the central leadership of the country which
impacts on the macroeconomic performance of an economy. I think that it is the central
leadership of the country which takes the decision and it's rather the lack of political will and
lobbying is what destroys the potential of an economy.
6)
Is there any way the developed economy of the world can increase their GDP growth rate
significantly?
How can the government compel the organisation to include the interest of environment in
their decision making?

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How can the government absorb the effects of the business cycle in order to keep the inflation
low for a long period of time?
7) The chosen cartoon is the left one.
I have the capital and I control the GDP growth rate of the economy.

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Reference
Afolabi, L. O., Bakar, N. A. A., & Aziz, M. I. A. (2016). Openness And Ecowas Regional
Trade: A Panel Cointegration Analysis Using A Gravity Model. Aktual'ni Problemy
Ekonomiky= Actual Problems in Economics, (177), 319.
Baumol, W. J., & Blinder, A. S. (2015). Microeconomics: Principles and policy. Cengage
Learning.
Mizuno, T., & Kinoshita, E. (2017, June). A Macroeconomic Model for Service Science
Capitalism: Thetical and Antithetical Economics. In International Conference on
Intelligent Decision Technologies (pp. 301-308). Springer, Cham.
Venkatesan, M. (2015). Sustainability in the curriculum and teaching of economics:
transforming introductory macroeconomics. American Journal of Educational
Research.
Wyplosz, C. (2015). The Eurozone crisis: Too few lessons learned. Baldwin and Giavazzi,
eds,(2015), 198-204.
Zapalska, A. M., Jackson, H., & Zelmanowitz, S. (2016). Framework for Leadership Skills
Development with Experiential Learning: an Example of an Undergraduate
Engineering Program. International Journal of Science and Engineering
Investigations, 5(57), 38-44.