Eco365

WEEK 4 REFLECTION SUMMARY

June 13, 2013

This week’s readings were a little more in my comfort zone. Chapter 17 and 18 talked about Deficits and Debts and how to finance the deficit. I mainly learned the different ways deficits are distinguished. When the economy is operating at its potential and has a deficit it would be called a structural deficit but if it’s not at its potential and has a deficit it would be a passive deficit. In these chapters I also learned that it depends on where the economy is potentially if a deficit is good and a surplus is bad.  

The only thing I may have an issue on is the financing the deficit part.

~Hong

I have enjoyed reading chapter 17 about deficits, debt, and surplus. With my understanding from this chapter, deficit is an amount of expenditures which spending more than revenues. For example of this is, assuming our revenue is $2,500 per month, and our expenditure $3,000 per month. So, our deficit is $500. The Government of United Stated has spent a lot of money for the war and terrorism protection in the last decade. Therefore, United States’ debt was increasing so quick from billion to trillion dollars. However, United Stated can afford handling the current debt and can afford to pay the interest on that debt due to the values of the United States bonds and assets are more valuable than the debt and safest in the world.

I am struggling to understand well the differences contracture deficits, passive deficits, and actual deficits. Hopefully we will clear it in the class on Friday night.

~Stephanie

I felt better about this week’s reading as well (as far as comprehension of subjects discussed versus the past week’s readings). I learned the differences between structural deficits and passive deficits, and worked on understanding how to explain them (if we have to do so on the board this week as per past class sessions).

While I understand the explanation of ‘financing the deficit’, I do not agree with, nor...