Economics Essay Example | Topics and Well Written Essays - 1250 words - 7

Economics - Essay Example Malthusian economics posits that the world economy is in danger as that the arithmetic growth of food production cannot keep up with exponential growth in population. What he fails to anticipate is the rapid technological improvement which significantly improved productivity. The present world situation becomes a proof of how technology has improved the efficiency among economies. It should be noted that technologically advanced countries like United States and Japan enjoys high level of production compared to their less advanced counterparts. The change in technology can be illustrated as a shift in the production possibility frontier. With technological advancement, processes in the value chain are conducted more efficiently. Mechanizing processes even necessitates the employment of less human resources which can significantly slash production costs. These resources can then be channeled to the production of other goods. In order to prescribe a solution for the problem of unemployment, it is important that its causes should be first laid out and fully understood. There are basically four types of unemployment each with different causes. This section will examine how to efficiently create jobs and reduce demand-deficient unemployment. Demand-deficient unemployment occurs when there is not enough demand to employ all those who want to work. It is also known as cyclical unemployment as it directly varies with business cycles. It can be noted that when the economy is booming, there is a strong demand for employees from various firms. This will cause a low level of demand-deficient unemployment level. However, during times of recession, demand for labor will drop thereby causing an increase in demand-deficient unemployment. Economic growth and unemployment are seen to be inversely related. As the economy grows, more jobs are created and unemployment declines.