A Macroeconomic Perspective of the Economy
Course title and number: Economics 1 BUS 121
Graded project Number: 05047700
When over looking the behavior of the economy through a macroeconomic perspective, the viewer is looking at the economy as a whole rather than taking apart and observing the individual pieces. Of course there are hundreds of factors that attribute to the economy for example emerging markets that influence the overall health of the economy. Consequently with emerging markets come exchange-traded funds, which have been emerging more and more over the past decade. Another factor that ties in is outsourcing, which is nothing new and as been going on for years in order for companies to turn more of a profit for their product by getting the production portion of the process done overseas at a fraction of the cost. Wealthier countries are able to do this because their currency is worth more on a conversion scale. If we analyze the Mexican peso to the United States dollar for a period of five years we can observe the ups and downs of the economy, what factors attribute to them, and why each currency is worth how much it is worth on the exchange rate scale. “When the U.S. dollar was introduced on April 2, 1792, it was based on the peso with the exchange rate of 1 dollar to 1 peso” (“What is the Mexican peso?, n.d.). Since that time the exchange rate of Mexican peso to United States dollar has changed considerably. Due to supply and demand of products produced by either country the exchange will rise and fall. Consequently products produced by either country result in a higher or lower demand for that product resulting in the amount that the currency is worth in that country when exchanged for another countries currency. For example, if Mexico produced a product that was in high demand in the United States the Mexican Peso’s exchange rate would rise and the United States dollar would fall because it would take more dollars to equal 1
Graded project Number: 05047700
When over looking the behavior of the economy through a macroeconomic perspective, the viewer is looking at the economy as a whole rather than taking apart and observing the individual pieces. Of course there are hundreds of factors that attribute to the economy for example emerging markets that influence the overall health of the economy. Consequently with emerging markets come exchange-traded funds, which have been emerging more and more over the past decade. Another factor that ties in is outsourcing, which is nothing new and as been going on for years in order for companies to turn more of a profit for their product by getting the production portion of the process done overseas at a fraction of the cost. Wealthier countries are able to do this because their currency is worth more on a conversion scale. If we analyze the Mexican peso to the United States dollar for a period of five years we can observe the ups and downs of the economy, what factors attribute to them, and why each currency is worth how much it is worth on the exchange rate scale. “When the U.S. dollar was introduced on April 2, 1792, it was based on the peso with the exchange rate of 1 dollar to 1 peso” (“What is the Mexican peso?, n.d.). Since that time the exchange rate of Mexican peso to United States dollar has changed considerably. Due to supply and demand of products produced by either country the exchange will rise and fall. Consequently products produced by either country result in a higher or lower demand for that product resulting in the amount that the currency is worth in that country when exchanged for another countries currency. For example, if Mexico produced a product that was in high demand in the United States the Mexican Peso’s exchange rate would rise and the United States dollar would fall because it would take more dollars to equal 1