Even though countries could rank very high on the Gross Domestic Products and the standards of living, it does not mean that those are doing extremely well, some flaws arise that are not included in their ranking likes health conditions and benefits, human rights, and personal safety to name a few. Is important to control monetary, fiscal and macroeconomic policies for all 3 kinds of economy, this is an endless job and affects every single one of us.
Countries must also fight a high unemployment rate, this is an issue that affects manylow-income countries around the globe. These economies should focus on attracting investors and creating an equal opportunity employment for all of their citizens, but the main issue for any country is to improve and address the problem at the root, meaning areas like education. Nowadays, with globalization at its peak, uneducated folks do not stand a chance in modern society, countries should focus on modernizations and advances of technology and the innovation of products, goods, and services, these times require people to be more prepared and educated than ever and countries should focus on catching up.
Other matters include keeping the inflation rate low, some of the middle and low-income countries experience a spike on inflation rates which hurts the economy and its citizens, this can be avoided by establishing and enforcing policies to control and repel budget deficits focusing on the more relevant matters that need to be addressed by sustainable policies.
Many of these countries enjoy international help which alleviates the struggles and helps people put food on their table, even though international aid has the best intentions, sometimes is not enough and it causes more harm than good in the form of collateral damage. These economies need to establish a more desirable environment for investors to bring more jobs and increase the funding for education and health benefits for their citizens. Their challenges are obvious; the lack of infrastructure, the development of labor markets are some of the issues that stop economic growth, their countries have a need for stronger policies to foster advancement and connections to countries with more financial growth either in a way of partnerships or as an investment attraction that could improve the people’s overall living standards in the form of people’s development, innovations, potable water, social services, democracy, health benefits, sanitation, and better educational programs.
Last but not less important are the lowest income countries, among them, are most of the African continent like the Democratic Republic of Congo, Zimbabwe, Burundi, Liberia, Central African Republic, Niger, and Afghanistan. (Data World Bank, 2018). These poor countries experience hunger and lack of resources, with very limited to inexistent savings and limited class educational programs. Some of these countries have a school attendance rate of 50 percent, and a lack of health programs which makes it even harder for citizens to stay healthy. As a consequence, these countries are not attractive to investors because of the uncertain return on investment and political policies which could be unstable.
On the classification, there are the middle-income economies, formed by countries like China, South Korea, Singapore, Indonesia, Malaysia, Thailand, India, and China among others. These countries macroeconomic policies focus more proactively on the development of human capital, attraction towards technology innovation, and a relevant connection towards more advanced economies and global markets to achieve growth; some of these countries enjoy a higher rate of savings, among programs to invest in human growth and development with extensive educational programs whose focus on subjects like math and science which are so important for business market around the globe. These countries know for a fact that strong support towards innovation programs to develop the workforce will lead to a more competitive market regardless of the political challenges those countries face internally.
Another issue that might raise with macroeconomic policies is income inequality which is a direct result of a strong consequence of fiscal policies, some low-income areas could be left behind during economic development, which is important to keep the resources distributed evenly and according to each individual needs of community areas. Most low-income areas get left behind during economic growth, this is evident in the increase in social services and welfare, which is important for an aggressive program to break the cycle of past generations and implement a stronger educational program with an increase in school funding for this less fortunate areas. The establishment of outreach centers and career development centers can cause an increase in human capability, an investment in human capital development is the only way to avoid income inequality for stable economic growth.
These countries need to focus on sustainability of growth to avoid recessions, is very important to track short-term growth but the government should also be aware of the importance of stable growth in the long term. By addressing this issue, these economies will display a more steady and linear growth rate without experiencing any setbacks.
The higher-income countries on this list are led by the United States, Western Europe, and Japan. These countries are very successful at implementing macroeconomic policies to boost their economy. These economies show a high rate of productivity caused by a very strong push towards technological advances, innovations, great educational programs, investments in human capital, infrastructure, and efforts to keep unemployment and inflations rate as low and stable as possible. The use of fiscal and monetary policies is the key to economic development but as always, everything comes with a price. Among the consequences of growth policies for this country, we can find a higher pollution rate due to more cars on the road and more industrial factories; therefore is necessary to implement and focus on the decrease of pollution, countries should establish and reinforce sustainable living and hold people and business accountable for their actions.
By penalizing wrongdoing and behavior, the government can keep pollution at the lowest rate possible. Based on GDP per capita per year, the groups are divided into 3 classifications: low, middle, and high-income countries. These groups form 100 percent of the world population, it is not surprising that 69.4 percent of the world population is formed by middle-income families, followed by high income formed by 18.8 percent and the low income close to 12 percent of the total world population.
Identify and briefly describe each group, and include examples of nations that would be classified within each particular group. It is imperative for countries to pay close attention to these numbers and make sure that budget deficits do not become a norm, this snowball of debt will swallow the whole economy and should be avoided and addressed continuously. One of the solutions for the national debt is to increase taxes, this is one of the heated debates of this week. A tax increase on fuel has many negative and positive effects, among those, will be the extra revenue for infrastructure and highways and on the negative side, the increase in tax equals a decline in people’s acquisition power. Several suggestions of mileage tax or an increase of tax on fuel-efficient cars were proposed on this matter, however, there is no easy solution for these problems and issues, but the government should aim for solutions that help its citizens achieve economic and financial growth regardless of the country’s overall political preference and status.
This week’s material addressed issues of high importance, among those, our national debt, the debating subject of the tax increase on fuel, and the classification of living standards around the globe based on Gross Domestic Products per capita.
National Debt is a very important issue that economies need to address, this matter causes a negative effect on the economy and affects all citizens of a country. Even though most citizens accept National debt as long as it boosts the economy, some situations could get out of hand. The United States for For example, even though it has one of the strongest economies around the world has a huge amount of international debt, A debt per capita in the United States is $61,365 dollars up to march or 2017 (Mirza 2017), this number is both impressive and shocking. These figures state that even a baby that was born today is already in debt.
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