Macro Economic considerations

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      When people hear about the national debt and the economic stagnation of Japan one would wonder why something like this would happen. The debt to GDP ratio although an important metric is likely a very broad and probably overly generalized metric which doesn’t have as significant an implication as others argue on a modelling viewpoint. The health of an economy is based on a few macro economic pillars that are constantly being monitored including inflation, interest and currency strength. Although economies are viewed broadly as combined output, high combined output doesn’t necessarily mean an economy is doing well. Macro relative economy measures (inflation, interest, currency strength, trade balances) also don’t necessarily directly imply relative nation to nation equity and asset wealth, business Equity to debt ratios. Internation autonomy and market resilience and domestic Wealth distribution. So taken into account of these factors and viewing a state like the Emirates , although the Arabian gulf oil rich nations would face lower demand due to falling oil supply and decreasing trade balance they would have supplimented these losses from having strong investment funds. These investment funds hold the national asset and equity positions by investing in global securities. On the equity side of the national side this would mean they are financially secure, on the output side however they may be worst then some third world nations. Domestically, their flow of funds will constitute gross domestic product and the consumer price index. Although their domestic industries are active and theoratically sustaining the nation’s consumer demands it is not through this domestic service output which is sustaining the nation’s economy. There for it is advisable to give a second thought on domestic service industry and it’s outputs implications. A theoratical perfect market should have the highest consumer surplus but should also take into account of the access of funds (labour wages) which are practically labour efficient. There for domestic labour markets should take into account of the utility of a service output, also it’s wage contribution to workers and what they can access. For example in Hong Kong there’s an over supply of graduate lawyers, the market conditions permits that lawyers are still relatively expensive to hire given business practices while lawyer rage rates are unequal. Would it make sense that, there be reasonable lawyer wages while increasing the supply of their services, decreasing the market price and and spreading out the spread between wage and service price. Using this lawyer example, lawyers or prostitutes are high utility workforces in an economy, they provide an essential service. As stated above alot of economic put are based on non vital services which are more for providing redistribution of funds (multiplier) then for essential services.

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