Why not get it somewhere else?

        With the currency in the United States shooting up, it seems like that would be a good thing, but that is not the case. The US, with a strong currency, faces a problem with its economy. Although, the economy is getting better it’s also making other countries with currencies that are not as strong benefit from the strong dollar. Their goods become so much cheaper and a greater value as their money is not worth as much.  American goods are now more expensive and this causes their exports of goods to other countries to decrease.  Americans, finding cheaper goods in other countries, cause imports from other countries to increase. Although, it seems like an absolute advantage it’s turned the other way because there is such strong competition. It puts the US in an interesting situation because although the price of supplies stays the same here the price in other countries decreases which causes a loss of buyers. Being an American who has been to countries with weaker currency I understand the wonderful feeling of being surprised at how cheap everything is, and wishing it was more like this here, and as a result, spending more money there then I would have here. You can get more things for cheaper prices so that’s what the US has had to deal with in this day and age. Why would someone buy something from America when one could get it somewhere else for half the price? It’s an unsolvable problem for now until the demand for goods overseas causes their currency to increase and the U.S. currency to decrease. It’s a good thing that the economy is doing well, but because of that, we just have to deal with the consequences like being in more competition with economies worse than ours.  The demand for other goods increases when the price decreases, so with the currency rising, the demand for goods in other countries increases, because the prices decrease. These goods include cellphones, clothing, furniture, cars and computers. Also, these imports have been rising for only a short period of time, with it rising seven point seven percent just from February. This is just one section that the US can’t control so they have to live with the idea that there is going to be competition. This is just an inevitable side effect.  These imports are mostly happening in Asia, for example, in China imports rose by nearly a third. They have found out that they are only outputting thirty-seven percent while on the other hand they have nearly a quarter of their goods and services exported. Overall the US is buying more then it’s selling so it is running a deficit which in turn can cause the economy to flounder. 

An American Horror Story

Student loans have dramatically risen throughout this last century.  The prices for college have gotten so high that it seems like student debt is inevitable. Although, they have created positive economics by helping students with their loans, the actual normative economics is that people are just getting deeper and deeper into debt. The demand of college has increased and this in turn has caused prices to increase. College has become a need in our lives so it seems like you cannot receive a good job, or with that good pay without going to college. Because of the increase in need based loans, colleges have taken advantage of this, and raised the prices of their school’s tuition . It takes years upon years to repay student loans and it changes the whole lives of these former students. It affects their wages because a large part of it goes to paying off college loans. Colleges understand their audience so they have good allocative efficiency, so that’s what makes them thrive. Colleges are making a good profit, so why would they change? Student loans have taken the money of people all across of America and will continue to for as long as we live. It’s the tragic truth.

        Hearing stories like the one of McCarthy, who has estimated that he has around seventy-two thousand dollars in student debt, is heartbreaking. Knowing that he has to deal with all this tragedy, for just wanting to further his education ,is unjust. It’s especially sad to know that it’s only going to get worse from now on and our children will have to face the tragedy of student loans. Colleges are making more and more upgrades to their facilities as a way of attracting more students.  As the demand for college grows and loans grow, the prices for college will increase – as demand increases so does supply.  In the case of college there does not seem to be equilibrium, and demand and supply just keeps increasing. As more people go to college, and loans are easy to get, prices will continue to go up, and student debt will continue to increase. In order to get a good job, one must get a college education or graduate degree. Soon most jobs won’t even accept workers who don’t at least have a bachelor’s degree. It’s a never ending cycle of debt with someone getting in debt to go to college so they can have a good job so they can pay of their debt. My question is what’s the point? 

Wal-Mart facing the Wall - Faith Barnes

    Over the last year, Wal-Mart has faced a decline in profits and is expecting a further decline in the coming year. Wal-Mart is going through great lengths to protect their companies’ profits in the long run. However, the short term results are declining profits.

    One of the ways, Wal-Mart is dealing with long term growth is that they are investing in human capital by hiring more workers and increasing the wage of their workers by one dollar. These changes will speed checkout lines and better stocked shelves.  As a result of these changes, Wal-Mart’s customers are spending more which in turn has increased their sales. Their opportunity cost is trading short term loss for long term profit. Only time will tell if this will pay off. 

   However, the addition of human capital is not the only reason that profits have dropped for Wal-Mart.  Currency fluctuations and low reimbursement for their pharmacy business has also eaten into their profits.  Another problem for Wal-Mart is competition from online stores like Amazon, dollar stores and their closest rival Target.  Wal-Mart has been investing in e-commerce to compete with online companies but this requires further capital.

    There has also been a demand for goods happening in the last month with items like clothes, furniture, building supplies and other everyday items. Because of competition and drop of profit Wal-Mart’s opportunity cost is not only higher wages but less marketing in return for lower prices.  They are sacrificing not only for the chance to gain more consumers and in return receive more profit. Competitors like Target are producing higher class items to attract a wealthier group of costumers by looking at their distribution efficiency. So to step up their game, Wal-Mart is moving their management system to one where they will be able to work faster to produce more efficiency in their stores. Hence, the opportunity cost for Wal-Mart is that their sacrificing some of their marketing to increase price cuts to beat out competitors like Target, who are known for having higher class items. By lowering their spending on marketing, which they really do not need because of how nationally known they are, they will gain money to lower their cost of items.

    While I applaud Wal-Mart’s move to invest in human capital, I cannot see how this would increase profit.  Faster lines and well stocked shelves may bring in more customers but ultimately Wal-Mart shoppers are attracted to the low prices.  Although, it is the goal of Wal-Mart to lower prices, I cannot see how they can do this with higher spending on wages.  Sacrificing more marketing is not going to be enough to keep prices low.