Your mission is to explain one economic principal in a short newspaper or magazine article. Do NOT just summarize the article. The article you choose CANNOT be an article we have discussed in class. Your article must be recent ï no more than 3 months old. For example: An article is about the falling prices of Cell Phones. You might explain why, in economic terms, the Price is decreasing. It could be shifting of the Supply and/or Demand Curves, changes in Technology, changes in "Taste". Or some other reason.
So I went to CNN.com and picked out a random article which is titled "consumer prices drop."
I think it is a bit choppy and I had some problems with the conclusion. Suggestions on that?
Also did it meet requirement? I did explain the circle of flow model and how it relates to the article but I don't know if it's good enough.
Critique please.
"Consumer prices drop"
The labor department reported that consumer prices have fallen, offsetting the increasing
food prices. Consumer prices have fallen 0.1 percent which is the first decline in prices since October 2006. This came after the Federal Reserve cut interest rates in an attempt for the country to not fall into a recession, a period during which a country experience a decline in their GDP.
A recession would disrupt the circle of flow since more unemployed people equals less money returning back into the economy. The fall in the consumer prices helped workers giving them more spending. The average weekly wages has also increased .5 percent after 5 months of decline. This also helped in giving workers more money to spend in the economy. However, food prices have increased by .4 percent.
"The Fed in its statement said that 'some inflation risks remains,' but by making the bolder half-point cut in its federal funds rate, it was signaling that it clearly believed the threat of a recession outweighed concerns about inflation." Inflation remain contained, only rising .2 percent.
In addition to higher food cost, energy and gas prices have soared. Energy cost is up to 12.7 percent annual rate this year and oil prices have achieved a record 80 dollars per barrel. This is a problem for consumers. Even with the help of the increase in average wages, consumer spending will be slowed due to the energy and oil prices. Medical care cost rose .5 percent in August and is now 4.5 percent over the past year. We will certainly not see hospital patients spending many as they will have to pay their expensive medical bills.
Even though consumer prices have fallen, other prices have continued to surge. With these prices increasing, it is uncertain whether the economy can continue to run smoothly without problems. The Federal Reserve has help temporarily to curve recession. Further steps are needed are to get the economy in a stable condition.
So I went to CNN.com and picked out a random article which is titled "consumer prices drop."
I think it is a bit choppy and I had some problems with the conclusion. Suggestions on that?
Also did it meet requirement? I did explain the circle of flow model and how it relates to the article but I don't know if it's good enough.
Critique please.
"Consumer prices drop"
The labor department reported that consumer prices have fallen, offsetting the increasing
food prices. Consumer prices have fallen 0.1 percent which is the first decline in prices since October 2006. This came after the Federal Reserve cut interest rates in an attempt for the country to not fall into a recession, a period during which a country experience a decline in their GDP.
A recession would disrupt the circle of flow since more unemployed people equals less money returning back into the economy. The fall in the consumer prices helped workers giving them more spending. The average weekly wages has also increased .5 percent after 5 months of decline. This also helped in giving workers more money to spend in the economy. However, food prices have increased by .4 percent.
"The Fed in its statement said that 'some inflation risks remains,' but by making the bolder half-point cut in its federal funds rate, it was signaling that it clearly believed the threat of a recession outweighed concerns about inflation." Inflation remain contained, only rising .2 percent.
In addition to higher food cost, energy and gas prices have soared. Energy cost is up to 12.7 percent annual rate this year and oil prices have achieved a record 80 dollars per barrel. This is a problem for consumers. Even with the help of the increase in average wages, consumer spending will be slowed due to the energy and oil prices. Medical care cost rose .5 percent in August and is now 4.5 percent over the past year. We will certainly not see hospital patients spending many as they will have to pay their expensive medical bills.
Even though consumer prices have fallen, other prices have continued to surge. With these prices increasing, it is uncertain whether the economy can continue to run smoothly without problems. The Federal Reserve has help temporarily to curve recession. Further steps are needed are to get the economy in a stable condition.
