Essay on Major Economic Events

Immediately after a natural disaster such as a hurricane, there is an increase in the demand for some goods. For example, if many people are trying to leave a particular area, the demand for fuel will go up. With the increase in demand for fuel, the sellers will increase the prices of the fuel. On the other hand, transporting goods into an area that a hurricane has hit is likely to be costly because many infrastructures, such as roads and bridges, have been destroyed in the disaster (Havard Business School, 2020). Inability to transport the goods such as fuel will increase the prices even further because the supply is limited and the demand is high. When this increase in prices increases, the sellers will try to increase the supply to maximize the profits. When this happens, supply increases, and the prices will go down, bringing equilibrium to the economy.

A combination of the great recession and the housing bubble burst of 2006 led to the decrease in the number of workers in the USA. The number of nurses, for example, reduced. This meant that the supply of nurses reduced while the demand for healthcare services remained the same. This also meant that accessing health services became costly. As the prices for the health care services remained high, the nurses in the country enjoyed higher pay which also attracted more medical services practitioners (Greenlaw & Shapiro, 2017). If more workers are attracted, then the supply increases and the prices will go down to meet the rising prices and settle at an economic equilibrium.

The requirement curve (D) for the people who wat to employ nurses is contrary to the supply curve (S) for those with the skills and are ready to work in the equitable environment (E). Equal pay is $ 70,000 and equivalent amount is 34,000 workers. At the above equivalent $ 75,000 in salary, the amount donated increased to 38,000, but the number of nurses seeking higher prices dropped to 33,000. For overpayment, there will be an overcrowding or remainder of nurses. At a minimum wage of $ 60,000, the amount provided decreased to 27,000, while the minimum wage increased to 40,000 nurses. At this minimum wage, excessive demand or shortage exists.

Interest in the cost that accompanies borrowing money or can be told to be the cost of risking the money in borrowers’ hands. Whenever there is an increased borrowing rate, the demand for more money increases and interests rates go up. When the demand for borrowing goes down, the banks and other money lenders reduce the interest rates to attract more borrowers. On the other hand, more borrowers will tend to borrow money when the interest rates are low. More borrowers mean the lenders will increase the interest rates again, and the rates will go to their normal rates hence an economic equilibrium (Heakal, 2020).

Peace and order are among the factors that investors consider while considering a place to invest. Peace and stability stimulate economic growth, which was not a common sight during the cold war. Collapsing of the Soviet Union and the end of the cold war meant that there would be more economic stimulation with the increased supply of goods and services to the market. More people could work in peace and increase the supply. Prices of goods and services would reduce compared to the time of the cold war (Arranza, 2017). On the other hand, demand for goods and services would increase and, in turn, increase the price. The lower prices brought about by peace would meet the higher prices brought by increased demand hence an equilibrium.

The dot-com bubble was excess speculation of the internet companies. This led to billions of investments in internet companies. The demand for internet-related services was constantly rising while the supply of such services went over the fence. This rendered the high prices of internet services useless amid almost steady demand. This, in turn, led to the collapse of the explosive industry because the prices were lowered to meet the little demand that existed. The supply also reduced, bringing the industry into an economic equilibrium (McCullough, 2018).

References

Arranza, J. L. (2017, December 21). Countryside peace and order to balance economic development | Dr. Jesus Lim Arranza. BusinessMirror; https://www.facebook.com/BusinessMirror/. https://businessmirror.com.ph/2017/12/21/countryside-peace-and-order-to-balance-economic-development/

Greenlaw, S. A., & Shapiro, D. (2017, January 12). Demand and Supply at Work in Labor Markets – Principles of Economics 2e. BCcampus Open Publishing – Open Textbooks Adapted and Created by BC Faculty; OpenStax. https://opentextbc.ca/principlesofeconomics2eopenstax/chapter/demand-and-supply-at-work-in-labor-markets/

Havard Business School. (2020, April 1). Price Gouging vs. Supply and Demand | HBS Online. Business Insights – Blog. https://online.hbs.edu/blog/post/supply-and-demand-or-price-gouging-an-ongoing-debate

Heakal, R. (2020). Forces That Causes Changes In Interest Rates. Investopedia. https://www.investopedia.com/insights/forces-behind-interest-rates/

McCullough, B. (2018, December 4). A revealing look at the dot-com bubble of 2000 — and how it shapes our lives today |. Ideas.Ted.Com. https://ideas.ted.com/an-eye-opening-look-at-the-dot-com-bubble-of-2000-and-how-it-shapes-our-lives-today/