Can the Government Stabilize the Economy (3 sections) Research Proposal

Can the Government Stabilize the Economy (3 sections) - Research Proposal Example. Such scarcity, whether natural or man-made, makes it necessary for everyone to stretch whatever limited resources he has. Resources can be financial or physical. Practically every one has to make hard choices, to make trade-offs as between one bang-up or service and an otherwise. A finale to have one or more of one involvement means that one will have less of something else. The relevant cost of any decision is its hazard cost- the value of the next best alternative one has to give up. Economists stress that one must everlastingly calculate the opportunity cost of any specific choice.It would be an idealistic situation if a polity maker had all the resources with which to grow the case economy. Scarcity is not the basic premise of growing an economy but rather the availability and the optimal utilization of resources. A country such as the linked States has considerable amount and diversity of resources such that it can become self-sufficient however, less naturally endow countries would have to grapple with dire scarcity to some degree and will have to procure resources other countries. In a particular case where a country has to consider only what resources it has within its national borders, it will have to make choices about how to use them to maximize or optimize production. In a simplified production possibility frontier (PPF) model where a country has limited resources and a wedded technology and has only two outputs from a fixed supply of inputs, the decision maker has to make decision about the various combinations of the two outputs, such as wheat and soybeans, or food for thoughtstuff and computers. The production of food alone and none of computers will likely not use the resources available in an optimal way. The ideal combination might lie between the two extremes where a certain proportion of resources are occupied for the production of food and compu ters jointly. The concept of the production possibilities frontier comes to our mind it shows the