DAFTAR ISI
TINJAUAN MATA KULIAH
MODULE 1 : ECONOMIC TERMS FROM A TO B
MODULE 2 : ECONOMIC TERMS FROM C TO D
MODULE 3 : ECONOMIC TERMS FROM E TO F
MODULE 4 : ECONOMIC TERMS FROM G TO I
MODULE 5 : ECONOMIC TERMS FROM L TO N
MODULE 6 : ECONOMIC TERMS FROM O TO R
MODULE 1
ECONOMIC TERMS FROM A TO B
PENDAHULUAN
APA YANG DIMAKSUD DENGAN ECONOMIC TERMS ?
APA YANG DIMAKSUD DENGAN ECONOMIC TERMS ?
Economic Terms adalah istilah ekonomi yang dipakai dalam bidang ekonomi. Istilah yang berupa kata atau frasa itu dapat memiliki arti yang berbeda dari arti yang dikenal secara umum karena merujuk pada suatu kekhususan.
Dengan kata lain, istilah ekonomi tidak dapat diartikan secara harfiah, penelusuran kamus istilah, ensiklopedia, atau artikel yang berkaitan dengan bidang itu sangat dianjurkan.
LEARNING ACTIVITY 1
ECONOMIC TERMS STARTED WITH A
A. ADAPTIVE EXPECTATIONS
In economics, adaptive expectations means that people form their expectations about what will happen in the future based on what has happened in the past. For example, if inflation has been higher then expected in the past, people would revise expectations for the future.
A theory of how people form their views about the future that assumes they do so using past trends and the errors in their own earlier predistions Contrast with rational expectations.
B. ADVERSE SELECTION
This can be defined as :
1. the tendency of those in dangerous jobs or high risk lifestyles to get life insurance
2. a situation where sellers have information that buyers don't (or vice versa) about some aspect of product quality.
When you do business with people you would be better of avoiding. this is one of two main sorts of market failure often associated with insurance. The other is moral hazard. Adverse selection can be a problem when there is asymmetric information between the seller of insurance and the buyer; in particular, insurance will opten not be profitable when buyers have better information about their risk of claiming than does the seller. Ideally, insurance premiums should be set according to the risk of a randomly selected person in the insured slice of the population (55-year-old male smokers, say)
A theory of how people form their views about the future that assumes they do so using past trends and the errors in their own earlier predistions Contrast with rational expectations.
B. ADVERSE SELECTION
This can be defined as :
1. the tendency of those in dangerous jobs or high risk lifestyles to get life insurance
2. a situation where sellers have information that buyers don't (or vice versa) about some aspect of product quality.
When you do business with people you would be better of avoiding. this is one of two main sorts of market failure often associated with insurance. The other is moral hazard. Adverse selection can be a problem when there is asymmetric information between the seller of insurance and the buyer; in particular, insurance will opten not be profitable when buyers have better information about their risk of claiming than does the seller. Ideally, insurance premiums should be set according to the risk of a randomly selected person in the insured slice of the population (55-year-old male smokers, say)
In practice, this means the average risk of that group. when there is adverse selection, people who know they have a higher risk of claiming than the average of the group will buy the insurance, whereas those who have a below-average risk may decide it is too expensive to be worth buying. in this case, premiums set according to the average risk will not be sufficient to cover the claims that eventually arise, because among the people who have bought the policy more will have above-average risk than bellow-average risk.
putting up the premium will not solve this problem, for as the premium rises the insurance policy will become unattractive to more of the people who know they have a lower risk of claiming. One way to reduce adverse selection is to make the purchase of insurance compulsory, so that those for whom insurance priced for average risk is unattractive are not able to opt out.
C. ADVERTISING
It is :
1. the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media;
2. the business of designing and writing advertisements;
It is :
1. the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media;
2. the business of designing and writing advertisements;
3. advertisements considered as a group; This paper takes no advertising
Many firms advertise their goods or services, but are they wasting economics resources? Some economists reckon that advertising merely manipulates consumers tastes and creates desires that would not otherwise exist.
By increasing product defferentiation and encouraging brand loyalty advertising may make com[etition towards imperfect competition (see monopolistic competition) and increasing the ability of firms to charge more than marginal costs.
Heavy spending on advertising may also create a barrier to entry, as a firm entering the market would have to spend a lot on advertising too.
However, some economists argue that advertising is economically valuable because it increases the flow of information in the aconomy and reduces the asymmetric information between the seller and yhe consumers. This intensifies competition, as consumers can be made aware quickly when there is a better deal on offer
D. AGENCY COSTS
A type of internal costs that arises from, or must be paid to, an agent acting on behalf of a principal. Agency costs arise because of core problems such as conflicts of interest between shareholders and management.
Shareholders wish for management to run the company in a way that increases shareholder value. But management may wish to grow the company in ways that maximize their personal power and wealth that may not be in the best interests of shareholders.
These can arise when somebody (the principal) hires somebody else (the agent) to carry out a task and the interests of the agent conflict with the interests of the principal.
An example of such principal-agent problems comes from the relationship between the shareholders who own a public company and the managers who run it.
The owners would like managers to run the firm in ways that maximize the value of their shares, whereas the managers' priority may be, say, to build a business empire through rapid expansions and mergers and acquisitions, which may not increase their firm's share price.
One way to reduce agency costs is for the principal to monitor what the agent does to make sure itis what s/he has been hired to do. But this can be costly, too. It may be impossible to define the agent's job in a way that can be monitored effectively.
For instance, it is hard to know whether a manager who has expanded a firm through an acquisition that reduced its share price was pursuing his own empire-building interests or, say, was trying to maximize shareholder value but was unlucky.
Another way to lower agency costs, especially when monitoring is too expensive or too difficult, is to make the interests of the agent more like those of the principal.
For instance, an increasingly common solution ti the agency costs arising from the separation of ownership and management of public companiesis to pay managers partly with shares and share options in the company.
This gives the managers a powerful incentive to act in the interest of the owners by maximizing shareholder value. But even this is not perfect solution. Some managers with lots of share options have engaged in accounting fraud in order to increase the value of those options long enough for them to cash some of them in, but to the detriment of their firm and its other shareholders. See, for example, Enron.
E. AGRICULTURAL POLICY
The EEC (European Economic Community), now the EU (European Union), devised a policy designed to make its member states self-sufficient in foodstuffs, to secure farmers' living standards, to increase productivity , and to ensure reasonable prices for consumers. This has been achieved by the setting of intervention prices; when the market price for a commodity falls to this level the EU will buy the entire production at the intervention price. It is this policy which led to the accumulation of the notorious 'wine lakes' and 'butter mountains', and to high food prices within the community.
Countries often provide support for their farmers using trade barriers and subsidy because :
1. domestic agriculture, even if it is inefficient by world standards, can be an insurance policy in case it becomes difficult (as it does, for example, in wartime) to buy agricultural produce from abroad;
2. farmers groups have proved adept at lobbying;
3. politicians have sought to slow the depopulation of rural areas;
4. agricultural prices can be volatile, as a result of unpredictable weather, among other things; and
5. financial support can provide a safety net in unexpectedly severe market conditions.
Broadly speaking, governments have tried two methods of subsidzing agriculture. The first, used in the United States during the 1930s and in the United Kingdom (UK) before it joined the EU, is to top up farmers' incomes if they fall below a level deemed acceptable. Farmers may be required to set aside some of their land in return for this support.
The second is to guarantee a minimum level of farms prices by buying up surplus supply and storing or destroying it if prices would otherwise fall below the guaranteed levels. This was the approach adopted by the EU when it set up its Common Agricultural Policy.
To keep down the direct cost of this subsidy the EU used trade barriers, including import levies, to minimize competitions among EU farmers, to produce available more cheaply on world agriculture markets. Recent Amenican farms-support policy has combined income top-ups and some guaranteed prices.
As most governments have becomes more committed to international trade, such agricultural policies have come under increasing attack, although the free trade rhetoric has opften run far ahead of genuine reform. In 2003, rich countries together spent over $300 billion a year supporting their farmers, more than six times what they spent on foreign AID. Finding a way to end agricultural support had become by far the biggest remaining challenge for those trying to negotiate global free trade.
F. AGRICULTURE
Farming around the world continues to become more productive while generally accounting for a smaller share of employment and national income, althought in some poor countries it remains the sector on which the country and its people depend.
Farming, forestry and fishing in 1913 accounted for 28% of employment in the United States, 41% in France and 60% in Japan, but only 12% in the UK. Now the proportion of the workforce employed in such activities has dropped below 6% in these and most other industrialized countries.
The total value of international trade min agriculture has risen steadily. But the global agriculture market remains severely distorted by trade barries and government subsidy, such as the European Union's common agriculture policy.
G. ALTRUISM
It is unselfish concern for the welfare of others; selflessness
It is often alleged that altruism is inconsistent with economic rationality, which assumes that people behave selfishly.
Certainly, much economic analysis is concerned with how individuals behave, and homo economicus (economic man) is usually assumed to act in his or her self-interest. However, self-interest does not necessarily mean selfish.
Some economic models in the field of behavioral economics assume that self-interested individuals behave altruistically because they get some benefit, or utility, from doing so. For instance, it may make them feel better about them selves, or be a useful insurance policy against social unrest, say.
Some economics modelsgo further and relax the traditional assumption of fully rational behavior by simply assuming that people sometimes behave alturiistically, even if this may be against their self-interest, Either way, there is much economic literature about charity, international aid, public spending and redistributive taxation.
TUGAS 2
Untuk TUGAS 2 ini anda akan diberikan pilihan topik untuk membuat sebuah essay dengan panduan sbb:
1. Buatlah essay dengan paling tidak 3 paragaph (1 buah paragraph awal, 1 buah paragraph
isi dan 1 buah paragraph penutup).
2. Tulislah jawaban anda pada rentang antara 150-200 kata.
3. Jawaban essay diketik dan dikirimkan ke Forum Tugas dalam bentuk Word.
Pilihlah salah satu topik berikut:
A. The number of GDP can always tell whether a country is prosperous or not.
Do you agree or disagree to the statement?
B. Human Capital can only be implemented successfully in a developed country (America, Britain, Japan, etc.}
Do you agree or disagree to the statement?
Selamat Bekerja.