darthpandaqueen

[darthpandaqueen]

Chapter 18 Reflection

Macroeconomic theories usually relate the phenomena of output, unemployment, and inflation. Outside of macroeconomic theory, these topics are also important to all economic agents including workers, consumers, and producers.

Macroeconomic theories are scientific theories that have been devised to provide insight into the workings of the macro-economy. They are primarily designed to explain how and why the level of gross domestic product changes, but they usually have direct implications for unemployment and inflation, as well.

I think the theories in general where the most interesting and useful, and just being able to understand in greater depths what actually happens within the economy and the cause and effect of it all. Since there was little I knew about the economy as a whole, every area changed my thinking and enlightened me. 

The debate I found most interesting is: Should monetary and fiscal policymakers try to stabilize the economy?

Fiscal policy has a stabilizing effect on an economy if the budget balance—the difference between expenditure and revenue—increases when output rises and decreases when it falls. ... Either way, higher deficit (or a lower surplus) effectively cushions the blow on output. 

I think I agree more with the pro side. As the con side say, the effects don’t occur immediately, but they wouldn’t in general. For dealing with large issues such as economic stabilization, it will need to take a longer time to achieve the goals put in place. Everything takes time to be applied and I believe that as long as it will help in the long run, it is worth a try.

[darthpandaqueen]

Chapter 17 Reflection

As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases. Short-Run Phillips Curve: The short-run Phillips curve shows that in the short-term there is a tradeoff between inflation and unemployment. . As unemployment decreases to 1%, the inflation rate increases to 15%. Unemployment has fallen, but a trade-off of higher inflation. If an economy experienced inflation, then the Central Bank could raise interest rates. Higher interest rates will reduce consumer spending and investment leading to lower aggregate demand. This fall in aggregate demand will lead to lower inflation. Since wages are sticky downward, the increased supply of labor causes an increase in people looking for jobs , but no change in the number of jobs available. Over time, as labor demand grows, the unemployment will decline and eventually wages will begin to increase again.

In the long run, unemployment returns to the natural rate, while inflation is at a higher level. Thus, both factors (changes in inflationary expectations and supply shocks) cause the Phillips Curve to be vertical with no long run tradeoff between inflation and unemployment.  According to economists, there can be no trade-off between inflation and unemployment in the long run. Graphically, this means the Phillips curve is vertical at the natural rate of unemployment, or the hypothetical unemployment rate if aggregate production is in the long-run level.

Short run – where one factor of production is fixed. This is a time period of fewer than four-six months. Very long run – Where all factors of production are variable, and additional factors outside the control of the firm can change technology, government policy. A period of several years.

However, not all economists believe there is a trade-off. Monetarists believe LRAS is inelastic therefore in the long term there is no trade-off. Also, through supply-side policies, you can reduce unemployment and increase economic growth without causing inflation.

[darthpandaqueen]

Chapter 16 Reflection

One of the principal functions of the Federal Reserve is to supervise and regulate various financial entities. In response to the events related to COVID-19 or the coronavirus, the Federal Reserve Board's Supervision and Regulation function has issued the following statements, guidance, and rules to support financial institutions and the economy. 

The Federal Reserve's response to this extraordinary period has been guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote stability of the financial system.

As the central bank of the United States, the Federal Reserve's (Fed's) mission is to promote the effective operation of the U.S. economy. It uses monetary policy—actions to achieve maximum employment and stable prices (also known as its "dual mandate")—to support economic growth. Effective monetary policy complements fiscal policy—the use of government spending and tax policies to affect economic conditions. The Fed also promotes the stability of the financial system; stable financial markets are necessary for a well-functioning economy.2 

The Fed plays a particularly important role in quelling financial and economic crises. In fact, it was created in part to do just that: After decades of destabilizing banking panics and other crises, the Fed was founded in 1913 to provide the nation with a safe, flexible, and stable monetary and financial system. When crises arise, the Fed is authorized to act as the "lender of last resort." That is, in certain circumstances the Fed may provide funds to the financial system when they are urgently needed and market sources have been exhausted. Doing so keeps the financial system functioning and prevents economic downturns from deepening. This authority came into play with the onset of the COVID-19 pandemic. Here we look at the substantial economic shock brought on by the pandemic and the steps the Fed took in the initial weeks to aid the economy.

In keeping with its mission, the Fed acted swiftly to address the economic and financial effects of the pandemic. It rapidly lowered the target range for its policy rate, the federal funds rate, to near zero to bolster the economy; took steps to stabilize the financial system; and undertook programs to support the flow of credit in the economy.

In January 2021 the Administration renewed the public health emergency for COVID-19, ensuring that critical resources to fight the pandemic can continue across the United States.

Since March 2020, Congress has undertaken legislative action to respond to the pandemic with emergency coronavirus stimulus packages. These measures have been aimed at funding COVID-19 research, testing, treatment, and vaccine development, increasing access to certain health care provisions, and lessening the economic suffering for individuals and business, as a result of the coronavirus pandemic.

In the short term, stimulus money put in savings or used to pay down debt may not give an immediate boost to the economy, but households that have more savings and less debt are in a better position to spend on a consistent basis going forward,” said Greg McBride, chief financial analyst at Bankrate.

Risks:

-Mortgage rates. The interest rate you pay on your mortgage is probably the most well-known way the Fed can affect your pocketbook. ...

-Auto loan rates. ...

-Home equity line of credit. ...

-Credit card rates. ...

-CD interest rates. ...

-The price of goods and services (indirectly) ...

-The job market (indirectly)

Monetary policy in the United States comprises the Federal Reserve's actions and communications to promote maximum employment, stable prices, and moderate long-term interest rates--the economic goals the Congress has instructed the Federal Reserve to pursue.

Through the FOMC, the Fed uses the federal funds target rate as a means to influence economic growth. To stimulate the economy, the Fed lowers the target rate. ... On the other hand, if consumer prices are rising too quickly (inflation), the Fed raises the target rate, making money more costly to borrow.

In March and April 2020, Congress enacted a series of bills to support businesses, individuals, and public health efforts. ... In contrast, stimulus provides incentives for people increase spending or work effort and businesses to increase hiring and investment. The goal of stimulus is to raise economic activity

I don’t know if I agree with everything being down by the FRB and the Federal Government, but can only hope that some of their actions lead to the economy regaining its stands and recovering fully after the pandemic.

Fiscal stimulus can raise output and incomes in the short run. To have the greatest impact with the least long-run cost, the stimulus should be timely, temporary, and targeted. Fiscal stimulus, such as tax cuts or spending increases, can raise output and incomes in the short run by increasing overall demand. In a recession, a stimulus check can encourage businesses and individuals to invest or spend more with their higher disposable income. With higher consumption, demand will increase and, in turn, businesses will employ more workers.

[darthpandaqueen]

Chapter 15 Reflection

In the short term, wages are sticky and output decreases along the SRAS, as we move from E1 to E2. Over time, wages decrease and as they do, the SRAS shifts to the right due to the decrease in firms' cost of production. The SRAS continues to shift until GDP has returned to potential.A decrease in aggregate supply in the short-run aggregate market results in an increase in the price level and a decrease in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.

In the short term, wages are sticky and output decreases along the SRAS, as we move from E1 to E2. Over time, wages decrease and as they do, the SRAS shifts to the right due to the decrease in firms' cost of production. The SRAS continues to shift until GDP has returned to potential. A decrease in aggregate demand in the short-run aggregate market results in a decrease in the price level and a decrease in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.

The decrease in aggregate supply, caused by the increase in input prices, is represented by a shift to the left of the  curve because the  curve is drawn under the assumption that input prices remain constant. ... A second factor that causes the aggregate supply curve to shift is economic growth.

The long-run aggregate supply curve is a vertical line at the potential level of output. ... The short-run aggregate supply curve is an upward-sloping curve that shows the quantity of total output that will be produced at each price level in the short run.

The short run does not necessarily last one month, or six months, or two years before giving way to the long run. Rather, the short run depends on the particular production under analysis. For some types of production the short run can last as short as a few days or weeks. It is not possible to vary fixed inputs  in a short period of time. Thus, in the short run the only way to change output is to change the variable inputs. Marginal product is the additional output a firm obtains by employing more labor in production. But in the short run, they are unable to capitalize on changes in demand with the same degree of flexibility. The short run does not refer to a specific period of time and is instead specific to the firm, industry or economic factor being studied.

If the firms make losses in the long run they will leave the industry, price will rise and costs may fall as the industry contracts, until the remaining firms in the industry cover their total costs inclusive of the normal rate of profit. 

In a perfectly competitive market in the long-term, this is taken one step further. In a perfectly competitive market, long-run equilibrium will occur when the marginal costs of production equal the average costs of production which also equals marginal revenue from selling the goods.

[darthpandaqueen]

Chapter 14 Reflection

https://www.usnews.com/news/business/articles/2021-02-05/us-trade-deficit-rises-to-12-year-high-679-billion;

For the most part I think I agree with the authors perspective. Due to the fact that most of what is said in the article I read where statistics, I would say I agree with him. 

Trade deficits are always offset by capital inflows. ... That is, a net inflow of foreign investment creates a surplus in the capital/financial account that will necessarily be accompanied by a deficit in the current account (primarily the balance of trade in goods and services).

When focusing solely on trade effects, a trade surplus means there is high demand for a country's goods in the global market, which pushes the price of those goods higher and leads to a direct strengthening of the domestic currency.

The balance of trade impacts currency exchange rates as supply and demand can lead to an appreciation or depreciation of currencies. A country with a high demand for its goods tends to export more than it imports, increasing demand for its currency.

Capital flight is the outflow of capital from a country due to negative monetary policies, such as currency depreciation, or carry trades in which low interest rate currencies are exchanged for higher-return assets.

When a country experiences capital flight, what is the effect on the country's interest rate and exchange rate? Capital flight is a large and sudden reduction in the demand for assets located in a country. ... If investors become concerned about the safety of their investments, capital can quickly leave an economy.

When there are differences in real interest rates between two countries that allow for the flow of financial capital, that capital flows to the country with the relatively higher real interest rate and out of the country with the relatively lower real interest rate.

It reduces the strength of the economy – and of the government, as it means a loss of tax revenue. Additionally, rapid capital outflows reduce the purchasing power of citizens in the affected country, and major assets may be devalued. ... Capital flight can occur in both developed and developing countries.

[darthpandaqueen]

Chapter 13 Reflection

In the simplest terms, a trade deficit occurs when a country imports more than it exports. A trade deficit is neither inherently entirely good or bad. A trade deficit can be a sign of a strong economy and, under certain conditions, can lead to stronger economic growth for the deficit-running country in the future. I found this interesting because when I first read about it, I thought the definition was something rather different. In my mind I thought it was defining a fall/decrease in trade. I hear the phrase being passed around every once and I while, but never asked what it had really meant so in my head and from context I thought of it as a fall/decrease in trade within an area. while reading I figured out the true meaning and had realized in some way I was on the right track but not fully there.

GDP is important because it gives information about the size of the economy and how an economy is performing. The growth rate of real GDP is often used as an indicator of the general health of the economy. In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well. I thought that GDP within this chapters information was interesting. I knew that GDP was used to display how the economy is doing and indicate the health of an economy, but I had never thought of trade implicating those numbers. When I think of GDP, I tend to only thing out the economy I live in and how that effects the numbers, but now looking at trade my horizon for looking at GDP has grown to think of and add in trade numbers and stats.

Foreign exchange rates, in fact, are one of the most important determinants of a countries relative level of economic health, ranking just after interest rates and inflation. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world. I took an interest in this while reading because of the same reason I thought of GDP and trade, I did not know how much is considered while looking at the economy. It is not only looking at one area or just the country, but everything as a whole, the economy within the country as well as the trades within that country.

Overall I was most interested in how much is really considered to figure out all the numbers for economy related statistics. It is truly amazing to see how big the spectrum for everything is in a country.

[darthpandaqueen]

Chapter 12 Reflection

There are many costs associated with inflation; the volatility and uncertainty can lead to lower levels of investment and lower economic growth. For individuals, inflation can lead to a fall in the value of their savings and redistribute income in society from saver to lender and those with assets.

There are really three major costs of inflation: Menu costs undertaken by businesses to update pricing, shoe leather costs (the effort people have to undertake to deal with inflation), decrease in purchasing power (which means savings are worth less), and redistribution of wealth from creditors and lenders.

The costs included when it come to deflation are, changing price tags, updating computer systems, reprinting catalogs, loss of government revenue, etc. Since tax provisions are based on nominal incomes, deflation may lead to a reduction in tax rates even in case of no change to spending power.

The problem with deflation is that often it can contribute to lower economic growth. This is because deflation increases the real value of debt- and therefore reducing the spending power of firms and consumers. Falling prices can discourage spending as consumer delay their purchases.

From an economic perspective, deflation affect two important groups: consumer and businesses. 

The affect on banks: 

Deflation increases the real value of debt while decreasing the value of collateral for loans. The resulting deterioration in the corporate and household balance sheets, combined with a higher real interest rate, tends to weaken loan demand and could lead to a sharp increase in loan loses. (I agree that deflation has a big effect on banks as well as other businesses.)

When making economic choices within your life, you should look at the rates of both inflation and deflation. By doing so you are able to have a better chance of making a good economic choice instead of a risky one.

[darthpandaqueen]

Chapter 11 Reflection

In comparison to the money supply, the monetary base only includes currency in circulation and cash reserves at a bank. In contrast money supply is a broad term that encompasses the entire supply of money in a country. Money supply includes fewer liquid assets, such as demand deposits. Since these cash reserves with the banks serve as a basis for the multiple creation of demand deposits which constitute an important part of overall money supply in the economy, it provides high-powered-ness to the currency issued by the reserve bank and government. 

The federal reserve banks are not a part of the federal government, but they exist because of an act of congress. Their purpose is to serve the public, the federal reserve banks are set up like private corporations. 

Money is created though open market operations; purchasing securities in the market using new money, or by creating bank reserves issued to commercial banks. Bank reserves are then multiplies through fractional reserve banking, where bank can lend a portion of the deposits they have on hand.

Four tools are used to achieved monetary policy goals: The discount rate, reserve requirements, open market operations, and interest on reserves. All four affect the amount of funds in the banking system. The discount rate is the interest rate reserve banks charge commercial banks for short-tern loans.

If bonds are bought in the open market, it increases the money supply in the economy by swapping out bonds in exchange for cash to the general public. Conversely, if the bonds are sold, it decreases the money supply by removing cash from the economy in exchange for bonds.

The money supply can increase by lowering the reserve requirements for banks, which allows them to lend more money.

I think that the current policies efficacy with regards to the pandemic, like most other things, is not perfect. Once one piece is figured out more show up with issues. I think that it is going to take some time to fix everything broken by the pandemic.

Inflation is always around, so if anything, everyone is always worried about it. I myself, don’t know a lot about it that I would have a solid idea if I was worried or not about it in the future. 

[darthpandaqueen]

Chapter 10 Reflection

Even in a healthy economy, there is some level of unemployment for three main reasons: 

Frictional unemployment: there are always some workers who are in between jobs.

Structural unemployment: as the economy evolves, there is an unavoidable mismatch between workers’ job skills and employers needs.

Cyclical unemployment: the component of overall unemployment that results directly from cycles of economic upturns and downturns. 

The government utilizes four main policies to address unemployment, which are minimum wage, unemployment compensation, subsidies for hiring costs, and public spending on matching efficacy. When deciding whether or not these policies have a positive or negative effect on unemployment, it truly depends on the policy you are looking at. There isn’t really a way to say whether the affects are overall negative or positive. 

*As a part of the federal response to the Covid-19 pandemic a $600/week federal unemployment stipend was added to the state unemployment stipends for the summer. The bill just passed as I type, this adds $300/week.*

By having this response to the pandemic it had people making more on unemployment then they had been making while working, therefore made more people not want to go back to work. I think it would be an appropriate response if it was for the stimulus checks rather than for the unemployment checks. Stimulus checks are used to boosts spending power and spur economic activity, but with the amount for an unemployment check is not appropriate, once again it made people not what to go back to work because they were making more by doing nothing than what they made from working a job.

[darthpandaqueen]

Chapter 9 Reflection

First and foremost, saving money is important because it helps protect you in the event of a financial emergency. Additionally, saving money can help you pay for large purchases, avoid debt, reduce your financial stress, leave a financial legacy, and provide you with a greater sense of financial freedom.

A business savings account gives you an extra cushion to deal with out-of-the-blue expenses. (Liquid assets). You can use the funds in the savings account to quickly pay expenses. You can easily move cash from savings accounts to the person or business you owe.

Risk and return go hand in hand. Higher return means greater risk, while lower returns promise greater safety. No matter how you choose to invest your money, there will always be a degree of risk involved. You should never invest in anything you do not fully understand.

While choosing my major I didn’t originally think about potential jobs/salaries. I hadn’t known what I wanted to go into when I first started school, only recently I have figured it out. Since I want to go into a government based job (not exactly sure what currently) it will take a good amount of schooling, and I believe it will be a good investment. I wouldn’t want to change my major just based on the schooling and time it will need to accomplish. I think that the non-monetary assets for my potential career are as expected for what I want to do and the uncertainty of it wouldn’t make me want to change it in anyway. 

[darthpandaqueen]

Chapter 8 Reflection

If the economy goes into a recession, we can expect an increase in the supply of goods, low  prices, and an increase in the supply if loan-able funds and lower interest rates. (A decrease in the supply of goods, higher prices, a decrease in the demand for loan-able funds and lower interest rates). In the past year we have seen these actions happen within the United States. High government spending to combat this crisis (Covid) could counter the trend on the equilibrium interest rate. I am not positive whether the equilibrium interest is currently up or down but due to how the year 2020 went, I want to say that it is down. 

The interest rates are so low largely because the economy is so weak. The federal reserve pledged to support the economic recovery and sighting to hold the rates neat zero until 2023. When you deposit money in some form of savings account with a bank or other financial institution, you get paid for their use of that money. The payment is interest on savings and is based on an annual percentage of the balance in your account.

Typically higher interest rates reduce investment, because higher rates increase the cost of borrowing and require investment to have a higher rate of return to be profitable.

[darthpandaqueen]

Chapter 7 reflection

“Consumption is tied directly to productivity”

Education and health seem to have counter active contributions to the economy. Higher educated people are healthier and therefore less likely to consume health care. So within every age group, higher educated people make fewer costs for health care than lower educated people. Poor health not only is more likely to cause lower education attainment, but it can also cause educational set backs and interfere with schooling. Evidence suggests that states that increase the level of education of their workforce see greater productivity.

The definition of infrastructure subsidy is money given by a government for projects that are beneficial to basic public services. An example of this is, money on making clean energy transportation affordable for all citizens. The infrastructure is important for faster economic growth and alleviation of poverty in the country. The adequate infrastructure in the form of road and railway transport system, port, power, airport, and their efficient working is also needed for integration of the economies of the world.

A high rate of population requires more investment. A rapidly growing population increases the requirements of demographic investment which at the same time reduces the capacity of the people to save. This creates a serious imbalance between investment requirements and the availability of invest-able funds. In economics, labor is a factor of population and with an increase in the labor force, due to population growth, the total output may increase causing the GDP to increase. The wages for labor may also decrease due to an abundance of labor, this would allow the cost of production to decrease. An increase in population provides genetic diversity, which means there is a greater chance of the species surviving from any particular disease or disaster.

I believe that in ways population growth has its advantages as well as its disadvantages. At the moment I don’t know which side of the discussion on population growth I would fall in.

I believe that we should subsidize parents. For many families, subsidized child care is the lifeline to work and with it they are able to get immediate and consistent child care from the start. Child care providers are paid directly through the program and parents also provide a supplemental payment (co-Pay) to providers as part of participation.

[darthpandaqueen]

Chapter 6 Reflection

The CPI gives the government, businesses, and citizens an idea about price changes in the economy and can act as a guide in order to make informed decisions about the economy.

The CPI is perhaps one of the most important government statistics because it affects a number of public programs and is used as a benchmark to set public policy, so if it calculated incorrectly there will be discrepancies and misplacement.

Inflation in Rural and Urban areas is different at the individual commodity level as well as others. The reason rural inflation is higher than urban inflation is because prices of individual commodities are rising faster in rural areas than in urban areas.

The CPI for urban consumers increased 0.3% in January on a seasonally adjusted basis. Over the last 12 months, the all items index increased 1.4% before seasonal adjustment. (2021 reports). Rural inflation rose to 7.73% in January (higher than urban at 7.39%) for the first time since June 2018. (2020 reports).

The CPI is see as being most useful to measure inflation, although its accuracy is questionable, especially when compared with other agency’s inflation measures.

The CPI is purposely constructed with a focus on the buying habits of urban consumers, it has often been criticized as not providing an accurate measure of either prices of goods or consumer buying habits for more suburban or rural areas. Overall I think that the accuracy for inflation with the CPI tends to be more of an important use than it may be for others.

[darthpandaqueen]

Chapter 5 Reflection

THE ECONOMY’S INCOME AND EXPENDITURE.

How are an economy’s incomes and expenditures defined?

Since income equals expenditure, GDP can be measured by adding up the income earned in the economy (wages, rent, and profit) or the expenditure on goods and services produced in the economy. Gross domestic product (GDP) is a measure of the total income or total output in the economy.

(income equals expenditure equals GDP).

2. What are an economy’s income and expenditure?

An economy’s income must equal its expenditure, because every transaction has a buyer and a seller. Thus, expenditure by buyers must equal income to sellers. Every one dollar of spending becomes one dollar of someone’s income.

An expenditure represents a payment with either cash or credit to purchase goods or services and is recorded at a single point in time (the time of purchase) compared to an expense.

The most current events that go with the economy’s income and expenditure is the recent income and spending Gains, which are the latest signs of economic recovery.

Since this Q isn’t currently finished, the current GDP would be from the 4th Q of 2020, which is $20.93 Trillion. Before the most recent Q’s GDP, the previous Q had $21.16 Trillion as its reported GDP. The current dollar GDP decreased 2.3% in 2020 to a level of $20.93 Trillion, compared with an increase of 4.0% in 2019. The growth and/or shrinkage of the GDP is important because it gives information about the size of the economy and how an economy is performing. The growth rate of real GDP is often used as an indicator of the general health of the economy. An increase in real GDP is a sign that the economy is doing well. 

For 2020 as a whole, a year when the Corona Virus inflicted the worst economic freeze since the end of WWll, the economy contracted 3.5% and clouded the outlook for the coming year.

Under the GDP, environmental protection, health care, and education are accounted for. Although it does not include actual levels of environmental cleanliness, health and learning. When it comes to health, it is addressed as a whole rather than the specific terms/areas.

[darthpandaqueen]

Chapter 4 Reflection

With the use of Uber and Lyft, the prices of taxi medallions are effected greatly. As more Uber and Lyft drivers are demanded, less taxi hailing and drivers are use or needed. With the demand of Uber and Lyft increasing, the supply of taxis decrease. As minimum wage increases the quantity demand of labor decreases. With a higher minimum wage, employers won’t be looking to expand their work force. On the other hand, as minimum wage increases the quantity supplied of labor increases as well. With a higher minimum wage, more people will be looking for jobs. 

[darthpandaqueen]

Chapter 3 Reflection

What had surprised me most about the concepts in this chapter was a pretty basic concept. That concept was that of International Trade. I have not known much about international trade, but when I think of it my mind only goes to the known spice trades. When I think of international or any trades I tend to think of the trading of spices, but I have never thought that trades can be that of anything offered by a country or even state. Knowing that there is more to trade helped me open my eyes more to the various actions that are included within the activity. Overall I believe that International trade is good. Some countries have things that many other may not and for those who don’t, trading is an easy way to obtain that item for personal use. International trade is a very good way to not only trade products but also capital, services and many more things that may be needed. My opinion about trading didn’t necessarily change (I have always thought it was a good idea and important) but instead my knowledge of it was expanded.Thinking of trade with China vs. trade with Wyoming can’t be thought about as in the same way. China is an international trade so therefore they have more of what we do not. While Wyoming is a national trade within the U.S, they are able to give products that are found within the U.S but are specialized within their state (they produce the best of that product). A recent purchase that was primarily produced overseas that I have are my face masks. There are locally provided options for face masks (I define Local as anything Colorado made or U.S.A made). I don’t buy my face masks locally because I have very sensitive skin and a lot of locally made products react with it. I have tried various kinds of face masks, but the ones that I have found work best with my skin are primarily produced overseas.

[darthpandaqueen]

Chapter 2 Reflection

The policy maker I chose to quote is former President Obama. President Obama was the first President that I remember the full presidency. 

A quote that would be a positive statement is;    “Change will not come if we wait for some other person or if we wait for some other time. We are the ones we’ve been waiting for. We are the change we seek.”

One quote that would be considered being a normative statement is;    “Washington is broken. My whole campaign has been premised from the start on the idea that we have to fundamentally change how Washington works.”

It matters whether statements are positive or normative because normative statements are based off of values of judgment while positive statements are based off of facts. By identifying which category a statement falls into, a sense of evaluation towards the statement occurs. When categorized the statement has a new look to it and becomes something that is in need of re-reading or a double look.

Generally speaking, when it comes to the economy not everyone will agree on the same topics. While looking at the table of propositions about which most economists agree there are some I agree with and then there are some I would disagree with. The basis to why I may disagree would have to do more with what may effect my area and what may be overdrawn within the economy.