Reference no: EM133372774

How Can We Best Increase Our Nation's Standard of Living?

There is substantial disagreement over how a country can best achieve the optimum standard of living. Some economists support considerable government involvement, price controls, and government rules and regulations. Others believe that government involvement should be minimal and limited to tasks including the provision of a legal system, military, police and fire protection, and providing certain public goods. Many believe that a combination of moderate government involvement and private initiative works best.

Controversial issues in economics include the role of profits, income and wealth distribution, unions, and government stimulus spending. Should we more heavily tax profits to more equally distribute incomes in our country? Should we encourage spending and discourage savings to stimulate economic growth, or should we do the opposite? Should we limit CEO compensation? Do unions raise real wages or only nominal wages, and are they beneficial or harmful to our economic growth? These are just some samples of important economic issues that we will elaborate on throughout the text. Let's define some important concepts first.