Economics

Fig.1
Normal macro-economic equilibrium is shown by the vertical line AS. At the point shown by AS, the economy will be at optimum output and almost everybody who needs a job is employed.    However the macroeconomic equilibrium represented here is one of a recession. The AD curve intersects the AS curve in an area of significant unused productive capacity. Capacity utilization is low and the unemployment rate is relatively high.
This is the situation the United States finds itself currently in.  The decrease in aggregate demand has been caused by a whole range of factors, but the fallout from the sub-prime mortgage crises is mostly to blame.  It is very difficult for businesses and consumers to access credit, that this has negatively affected aggregate demand.  Continued expansionary monetary and fiscal policies such as low interest rate environment, stimulus money are the key to kick-starting aggregate demand and getting the United States out of the recession.

Explain the long run adjustment in the case of a demand-side recession. Also explain why the conservative view places so much emphasis on the role of competition in this adjustment process. Write 250 words for your explanation.

Fig.2
During a recession, aggregate demand goes down until a certain price level at which consumers realize goods are cheap and start buying again. This ends the recession. The conservative view places so much emphasis on the role of competition in the adjustment process. Policies which stimulate competition amongst firms such as market liberalization and reduction of taxes, and barriers etc are advocated for by conservative economists. Competition in the market stimulates supply of more goods and services, at better quality and low prices. This will induce higher aggregate demand and an expansion in economic activity.
Employers will hire more workers, and this will have positive knock on effect on the whole economy.  As depicted in fig.2 aggregate demand will increase from AD0 to AD1. At the same time Aggregate supply will face an increase from AS0 to AS1. Firms will be compelled to produce more goods at the lowest possible cost possible, but of course this depends on the individual market structure respective firms work in. One is the adjustment of each firm to the appropriate factory size that maximizes long-run profit. The other is the entry of firms into the industry or exit of firms out of the industry, to eliminated economic profits or economic losses. The end result of this long-run adjustment is different for the two market structures based on the fact that perfect competition has equality between price and marginal revenue, while monopolistic competition does not

Draw and illustrate why the Keynesians take issue with the conservative view of long run adjustment. 250 words
Keynesian economics asserts the importance of the aggregate  HYPERLINK httpwww.investorglossary.comdemand.htm demand for goods as the driving factor, especially in downturns. Keynesian economics advocates government intervention, or demand-side management of the economy, to smooth out the bumps in business cycles and achieve full employment and stable prices. To stimulate the economy according to Keynesian economics, government intervention takes the form of government spending and tax breaks. To curb  HYPERLINK httpwww.investorglossary.cominflation.htm inflation, Keynesian economics believes government should cut spending and  HYPERLINK httpwww.investorglossary.comraise.htm raise taxes. The Keynesians take issue with the conservative view of long-run adjustment for a number of reasons.
Firstly the time it takes for conservative long-run adjustment policies to work maybe very long at a time people need help immediately. Conservative economists are of the view that, One advantage of automatic stabilizers is that the effects occur without the necessity of government action, which means that there is no delay, or lag, because of political controversies, administrative problems, or difficulties in determining whether the time has come to act.  Keynesians will argue that this non-interventionist attitude will not always work.

Fig.3
Increase in government spending, tax breaks, will spur aggregate demand, thus move the economy out the rescission from Y1 to point Y2.

Illustrate and explain the case of a stagflation recession and how this relates to the problems of global climate change and peak oil. 250 words.

In economics terms stagflation is an inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity.  The graph below illustrates the situation during stagflation. Aggregate supply and aggregate demand fall, but prices increase.
source  HYPERLINK httpwelkerswikinomics.comblog20080225stagflation-a-blast-from-the-past-could-mean-trouble-for-us-economy httpwelkerswikinomics.comblog20080225stagflation-a-blast-from-the-past-could-mean-trouble-for-us-economy

In the case of the United States, peak oil prices drove the country to almost a period of stagflation.  Between 2007 and 2009 oil prices rose to record highs, the result was this cause a supply side shock. Cost of production went up, because the high price of oil which is incurred during the production and transportation is passed onto consumers. In turn aggregate demand will fall as a result of the increase in the price of goods.

The effects of all these start a vicious cycle to a recession and to stagflation. Consumers cut spending, and businesses shed jobs to offset any losses incurred. The result is higher prices and high unemployment. The underlying problem of all this is that the worlds oil deposits are slowly getting dwindling.  There is thus a need to find alternative cleaner energy forms, to avoid oil price shocks and also stop climate change. As long as the world economy remains largely dependent on oil, this phenomenon will continue to again and again in the years to come.

Suppose Brazil plans to create a technology cluster similar to the way that Bangalore, India and Silicon Valley, California have developed. What can the government In Brazil do to facilitate this
The government of Brazil needs to institute and implement policies which are going to enhance the growth of technology in the country and at some extent to be the technological hub of Latin America. Some of the policies the government can implement
 Tax exemption on technological gadgets like computers and their accessories 
Investing enough resources in existing technological institutions and supporting technology related initiatives from high school to tertiary institutions. Opening new technological institutions and motivating the youth to participate vigorously.
Unlimited funding in research and development ( R  D )
Discuss how Michael porters competitive diamond could be used to identify a potential cluster in the area near Vancouver, BC, Canada
    Related supporting industries within should be identified, skilled labor be tapped, enough capital funding and an efficient infrastructural development area be identified. Firm strategy structure and rivalry should be emphasized taking into account of the established markets across the border in United States. The government should also motivate the companies to invest in the areas and realize their goals.
How does the free trade help the economic development of poor nation And how could it also hurt their development
Free trade opens new market opportunities for developing countries products. Poor nations benefit from foreign income which plays a vital role in the countrys economic development supporting different sectors of the economy and boosting the income of the farmers, suppliers, traders and the country in whole.  Free trade on the other hand allows the developed nations to dump their products to the poor nations using technological advantage in mass production of goods and cheaper products. Cheap products contribute to closure of industries due to unfair competition coming from the developed nations resulting to increase in unemployment, poverty and underdevelopment of the economies.
How can the auto industry support a more sustainable plan of development How would this be beneficial to the world Would there also be negative consequences to this
Through creation of employment on the car industries hence alleviating poverty in the world. Emission of carbon dioxide contributes to global warming threatening the existence of mankind when the ozone layer is tampered.
      5.    Does a physical size help a countrys economy to succeed Explain
Apparently not. The models of economic growth and development along with effective and strategic policies contribute a lot to the economic success rather than using the advantage of its geographical size. In the world we have countries like Singapore and Norway which are very tiny yet the economic development in terms of GDP per capita and well being of the nation and people is a hundred times than most large nations in the world. 6. How does globalization support the development of poor countries How might it also hold back their development
Globalization breaks down the barriers of trade, communication, financial intermediation and technology transfer. This has helped poor nations in accessing potential markets of their products in the west and developed countries, technology transfer from developed nations has enabled poor nations to be competitive and expand their economic sectors like communication and infrastructural development, liberalization of markets and financial interaction has strengthened their financial institutions. These factors have stimulated and supported the process of economic growth of many poor nations. Despite these positive developments globalization has stifled the growth of industries of many poor nations by pouring cheap products technology transfer contributes to over reliance of western nations and thus dependence resulting in neo-colonialism.7. Is agribusiness a critical factor for the success of developing countries Explain. Will countries be able to develop without a vibrant agriculture sector Explain
Due to lack of matured manufacturing sectors developing nations have relied and depended on agriculture as a gateway to uplift the majority of their citizens from poverty. Agribusiness helps countries to address food security and be self-reliant on food production thus focusing on other avenues of development. It would be difficult to develop without vibrant agriculture sectors because the bulk of people in poor nations depend on agriculture as a way of sustaining their livelihoods. Vibrant agriculture sector creates employment and ensures sufficient production of food enabling people to live and prosper.8. Dependence, Independence, or interdependence. Which is the best for the developing countries Explain.
Interdependence is the best solution. Interdependence will be necessary for developing nations because most of their economic structures are undeveloped and they need assistance from developed nations to bolster their economic development by assisting them in their industries ,superior technology know how  and transfer in different sectors and in turn the developed countries  access their markets and their advanced skills. Protectionism will hurt the development of poor nations by limiting the flow of goods and skills.9. Dependence, Independence, or interdependence. Which is the best for the richer countries which are already highly developed Explain
Developed countries will always be in an advantaged position when they approach the interdependence way. They have superiority in technological, manufacturing and industrial sectors which the poor nations are in need and in turn they will gain enormously from the natural resources and raw materials which are abundant in developing countries and scarce in their nation. Developing countries are also potential markets for their products as most rich nations have saturated markets while developing countries are growing.
10. As the developing world develops, can we all be (relatively) rich What would be the positive and negative aspects related to this
Not everyone will be rich but there will be a significant number of people who are going to be moderately rich. Economic growth creates more opportunities in employment, investment hence enabling people to accumulate wealth and resources. Economic growth is not necessarily economic development where the welfare and well being of all people are going to be guaranteed. In fact as the country develops fast it creates castes and social classes in the communities where the poor are alienated and only used by the rich to satisfy their own demands. Exploitation of labor is always a norm and the rich who happen to be very few protect their interests to avoid competition from the majority paupers. 11. How should a country with an assembly economy like Mexico chart a path to becoming highly developed country
Mexico needs to implement policies which are going to strengthen the country financial, judicial and economic institutions. Strong institutions lure investors to the country as their interests and investment will be safe and guaranteed within the country. Similarly the government must fully liberalize their markets and take advantage of trade agreements like NAFTA and related agreements. Corruption is a vice which the government must ensure it is almost zero to attract more investors. Concentration should also be emphasized on technology and manufacturing sector if the country dreams of becoming a developed nation.12. Is free trade area like ( NAFTA) a preferable way for member countries to operate than through a more far- reaching political and economic Union ( like the European Union) explain the relative benefits of each system
NAFTA and the EU are regions with markets that are fairly easy to enter compared to Japan and other places with high barriers (Gianaris, 1998, p.xii). NAFTA is comprised of about 3 countries with economic superpowers United States and Canada and developing country of Mexico. The principle goal of the body called NAFTA was to eliminate barriers of trade, communication and interaction between member states and in turn act as a stimulant for the economic growth of the nations. Mexico being a less developed economy unlike the two other member nations would supposedly benefit a lot by accessing the markets of US and Canada and gain a lot from transfer of skills while the markets of US and Canada would be widened. A free trade agreement like NAFTA is preferably because it focuses on the markets and trade rather than interference of internal political structures of member nations. EU is a big body of more than 27 member states and the number is still growing and their aim was to have not only an economic union but also a political union. Economic development is intertwined with political stability and European Union wanted to remove economic barriers and merge political to create a strong bloc sharing the same values and ideas.                                                  Short Essay Questions 1.  One of the main goals of super governmental organizations is to help the developing world develop. Are they on a path to accomplish this mission In what ways are they achieving this and in what ways are they a barrier to the poor world developing
The role of super governmental organizations and most non-governmental organization has been controversial for a very long time in developing nations although their contribution cannot be looked down upon. Super Govermental organization and non-governmental organizations fill the gap of development always left by the poor nations because of inability of having enough resources to help their people. These organizations focus on empowerment of people through economic sustainability, funding education projects, farming, preventing curable diseases and directly assisting the governments in capital intensive projects like infrastructure construction. They have helped thousands if not millions from poverty and assisted in key development initiatives in poor countries.  There are some of the organizations who have tried to achieve their specific mission by collaborating with the governments and the locals in implementing their projects. Despite the positive development associated with the organizations they have not achieved a lot in developing the poor nations. The organizations mostly are interested in funding from donor countries and they fund partly their projects to ensure a consistent flow of funds to individual pockets. There focus on assistance is sometimes questioned because they concentrate on minor projects which can be handled by the nations instead of investing on capital investment and infrastructural development. With them they bring along expatriates offering consultancy and mostly they spent 60 of their budgets on salaries. A pattern of dependence is developed and thus sometimes acting as agent of neo-colonialism from their powerful nations.
2. How has its geography had impact on an island country like Japan Beyond geography, what other factors has supported Japans development How can this help explain why japans economy has advanced at a much more rapid rate than the Philippines Like Japan, the Philippines are in island group, but its economy remains far behind Japan.
Japan utilized well the surrounding ocean by investing, researching and developing the fish industry to one of the best in the world. Being in a quack-prone area has enabled Japan to research on technological models on how it can cope with the catastrophes. Japan after World War 2 implemented policies which fast tracked development of infrastructure and technology. Boosted by their work -ethic models Japan invested and emphasized a lot on industries and manufacturing. Similarly Japan developed their financial institutions and reformed their government structures to suit their economic agendas. Philippines economic models were different from those pursued by Japan and although they were close to ocean little effort was put to advance their fishing industry. Manufacturing and industrialization was not their main policy of economic development. Philippine has also been destabilized by internal politics unlike Japan which had stability in government while implementing their economic growth policies.3. Discuss how disorganized capitalism is better for developed countries that organized capitalism would be, given todays economic realities. Given this situation, will developing countries benefit more from organized or disorganized capitalism as they seek further economic development Explain.
Disorganized capitalism gives the platform of government to intervene in the financial markets and any other sector of the country which is very sensitive and critical to the stability of the nation.  During recent economic crisis witnessed across the world the governments were forced to apply policies of socialization as they intervened to save the financial institutions from collapsing. Absolute free markets according to capitalism led to lies, distortions and exploitation of the market by few greedy individuals. Developing countries on the other hand need to blend a little of dis-organized capitalism and normal organized capitalism to enable them to act on events which threaten the stability of the nation economy.

The experiment is an observational study which aims at observing the differences between pregnant smokers, non-smokers and those who are ex-smokers and the difference in the results pertaining to birth weight, length, and head circumference of the babies.
The reduced production of the vasodilator nitric oxide (NO) in fetal vessels in pregnant smokers is the explanatory variable in the research, result in lower birth weight, length, and head circumference is the response variable while the confounding variable is the reduction of
blood flow to the foetus. The reduced production of the vasodilator nitric oxide (NO) in fetal vessels in pregnant smokers is the treatment. The observatory units for the research are people who are smokers, non-smokers and ex-smokers who are volunteers.
The research was carried out by observing the new born babies delivered by the three set of volunteers (smokers, non-smokers and ex-smokers) observing the babys weight, head circumference and their size. The result found was that Newborns of smokers had a lower weight (P_0.001) and a smaller head circumference (P_0.041) and were shorter (P_0.001) than newborns of nonsmokers and ex-smokers. eNOS activity in umbilical veins of smokers was 36 lower (P_0.001), eNOS concentration was 47 lower (P_0.001), and the fetal plasma level of high-density lipoprotein was 18 lower (P_0.001) than those of nonsmokers, whereas the same levels were found in umbilical veins from ex-smokers and nonsmokers(Anderson et al). This lead to the conclusion that maternal smoking reduces eNOS activity in the fetal vascular bed, contributing to retarded foetal growth which is as a result of the reduction of vasodilatory capacity, and suggest that cessation of smoking early in pregnancy prevents these effects in newborns. I agree with the conclusion of the author as the research was well carried out, with the author following the right process required of an observational research.

1. The nations first paper money known as continental was printed to finance the American Revolution. Produced by the Continental Congress, the fiat money notes were issued in large quantity that they led to inflation. People eventually lost faith in the notes giving birth to the phrase not worth a continental which means utterly worthless.
2. The Federal Reserve System was born in 1913. President Woodrow Wilson signed the Federal Reserve Act studied, created, and reviewed by Virginia Rep. Carter Glass and adviser H. Parker Willis.
3. Located in Washington D.C., the Board of Governors leads the Federal Reserve System. There are seven governors in the board, each appointed by the President and confirmed by the Senate.
4. The Federal Reserve System has approximately 3,000 member banks composed of 38 of the commercial banks in the United States. There are also about 17,000 other depository institutions that are subject to the regulations of the System.
5. The Federal Reserve has three instruments of monetary policy namely open market operations, the discount rate, and reserve requirements. Open market means that instead of the FED deciding on which securities dealers it will do business with, the choice emerges from various dealers who would compete on the basis of price.
6. The Federal Reserve also acts as a fiscal agent. It serves as a bank to the federal government providing financial services to the United States Department of Treasury. It also sells and redeems government securities such as Saving Bonds and Treasury Bills.
7. Reserve Bank presidents are obliged to retire by the age of 65. Those who are initially appointed after the age of 55 however, can, with the decision of the board of directors, be permitted to continue serving until the age of 70 or until they reach 10 years of service, whichever comes first.
8. There are three advisory councils that advise the Board of Directors directly. They are the Federal Advisory Council, Consumer Advisory Council, and the Thrift Institutions Advisory Council. Aside from these, there are also other committees that consult with individual Reserve Banks on matters such as agriculture and small business.
9. The Federal Advisory Council members meet with the Board of Governors four times a year to discuss economic and banking matters. Members of the Council come from each Reserve District and are most commonly commercial bankers.
10. The first attempt to centralize banking came in the form of the First Bank of the United States with headquarters in Philadelphia. It was established by the Congress in 1971 at the urging of Alexander Hamilton, the Secretary of Treasury. In 1811, the banks 20-year charter expired and the Congress refused to renew it by just one vote.

As a student who values a healthy, excellent, and holistic academic environment, I chose to apply in George Washington University to major in economics. Because GW sits at the heart of where American government, policies, and laws are shaped and implemented, I believe I have made the right choice.
    I have aspired for higher learning that is why a college diploma will be a big achievement for me. However, what I deem is an excellent education. With GW, I know this is possible as evidenced by its strong academic programs and top-notch faculty. Learning economics in this institution will be more than studying economic theories and theorists but the more important practical applications in the field combined with cross-disciplinary educational opportunities. In fact, I am thrilled to experience the real-world learning GW prides itself with as this will allow me to be hands-on and have a firsthand encounter in the field I chose. This will develop my personal and professional skills needed to thrive in a competitive and global economic world. This will also increase my chance of acquiring a future employment that is in line with my skills and experiential learning. Furthermore, this institution is home to high-caliber professors who are industry movers and shakers, thus, sharing a classroom with them will not only mean knowledge on current and past economic issues and perspectives to me and my classmates but honor and pride to us as well. Moreover, this University gives apt freedom for me to do academic research, one thing that I am passionate about. Hence, this scholastic autonomy will allow me to venture out in an academic journey suited for my personal and professional goals. Consequently, I treasure education outside the four walls of the classroom that is why given the opportunity, I wish to take part in a study abroad program to gain exposure and understanding of different economic cultures, policies, and points-of-view, which will enhance my own perspectives and worldview on my way to becoming a competitive professional.
    However, before experiencing all these opportunities for academic growth, I will need utmost help in adjusting to a whole new environment. With this, I know I will not encounter much difficulty as GW has designed a supportive guide for first-year students to ease the stresses of transitioning and studying at the same time. Additionally, I give importance to my social development and training. I deem that the two vibrant campuses of GW will enable me to meet new faces and personalities with its diverse student population. Meeting such multicultural student body will not only widen my contacts for future use but also create an awareness and understanding of the similarities and differences between and among cultures and lifestyles. With its location unlike any other academic institution, GW will offer me the opportunity to participate in educational, sports, and recreational activities with its proximity to museums, research laboratories, and federal parks. The vibrant activities for student involvement inside the campus also caught my eye. I have been involved in various activities in school and in my community and would want to continue this by joining organizations and communities in GW with causes that I personally believe in. Needless to say, the on-campus fun and recreational activities and events will also ease the pressure from all the studying. Finally, GWs high regard for sports also attracted me as I wish to pursue my love for health and fitness through physical activities.
    With all these beneficial factors, it is only fitting that I pursue higher learning in a university that will develop my skills in all aspects for personal, professional, and holistic growth in order to prepare me for a competitive and global world in the future. 
    With a goal to make it big and be an economic leader in the future, I deem an excellent education that comes from a great leader and innovator in the academic field as the most significant factor in molding my skills and enhancing my capabilities to their maximum potential. I have fortunately found this in Carnegie Mellon University.
    I am applying to major in Economics. With CMU, I believe I will have the opportunity to be equipped with adequate knowledge and understanding of how economies work in various regimes with the academic program that the University has designed. Additionally, as a student, I will have the opportunity to learn about other disciplines and fields with the Institutions interdisciplinary collaboration that will aid and supplement the economic theories and applications that I will learn from economics classes. This is significant as truly, economics co-exists with other fields and disciplines that affect the lives of people. Furthermore, the academic environment in CMU is professional and intellectual as its pool of educators are the best in their fields. Thus, being educated by these brilliant minds will bring not only theoretical learning but more so real-world applications and perspectives. Moreover, as home to numerous centers and institutes and known for being a global research university, my passion for research will be honed in CMU as it will give me the freedom to search for solutions to better and further todays economic and daily problems. In addition, the opportunity to learn outside CMU through study-abroad programs appeals to me. As a traveler myself, I value the experiential learning and different points-of-view of other people and cultures. I recognize that there is an opinion or tradition other than the ones I know and I am open and willing to know these. Hence, a term or a year learning other countries economies and cultures will make me a global and competitive student ready to face the big world as a future professional.
    Aside from the academic benefits offered within the bounds of CMU classrooms, the opportunities for growth outside are also plenty. In the campus alone, events and activities that I can take part in abound. Enhancing social skills and community involvement will be possible with student organizations. More importantly for me, physical and mental development will be maximized with fitness classes, recreational programs, and sports competitions. I have been a health and fitness enthusiast for the past years and knowing that CMU will allow me to practice my physical skills, enhance my strengths, and promote my wellness makes the University a healthy and fitting choice. Additionally, the CMU environment is one that is safe, secure, and supportive as evidenced by the presence of various health, medical, and psychological services and safety and security programs and centers, thereby, making my future adjustment and transitioning to college life easy and less stressful.
Meanwhile, outside the campus, Pittsburgh environment will give me the opportunity to experience culture with art and history museums and centers sports with Pittsburghs prides in baseball, football, and hockey and nature with the surrounding zoos, aviaries, and parks. All these will enable me to take my mind off the pressures of academics and relax and enjoy the experience of CMU life.
All these factors, namely, excellent academic and research programs and opportunities, healthy environment, and recreational time have made me chose Carnegie Mellon University. I believe the school has a lot to offer to me consequently, I also have a lot to contribute to this University.

Current Account is one of the two components of Balance of Payments, the other one being the Capital Account. The Current Account balance measures a countrys nature of foreign trade. A surplus in current account increases a countrys net foreign asset by a certain amount whereas a current account deficit is the amount that the country does not have in order to finance its current expenditures. A current account comprises of balance of trade, net factor income and net unilateral transfers from abroad. Balance of trade is a countrys difference between its imports and exports. Net factor income is the net amount of foreign inflows. From 1991 to 2006, the US current account deficit has risen from 0 to 6.5. Coupled with the increase in domestic consumption in US, one of the reasons behind the increase in the current account deficit is a major import of goods and services from China and other Asian economies. Oil imports and increasing oil prices till 2008 also added pressure on US current account. Running a high current account deficit for prolonged periods can have serious consequences for an economy. US till now has been successfully able to finance its deficit by raising debt through T-bills  Bonds in the international markets. Main holders of the US debt are Asian economies like Japan, China  Korea. By selling more debt to foreign economies, US is providing greater control to these nations over dollar. If a few nations start to liquidate their dollar holdings or convert them to some other currency or commodities like gold, it can result in an economic chaos and make extremely difficult for US to finance the deficit from international markets. However, to bring the situation under control, US will have to change its economys dynamics by shifting from a consumption based economy to a saving based economy and therefore, a slight increase in Fed rates is required. The recent weakening in dollar has done little to slow down the further deterioration of deficit. US will also have to reduce its reliance on imports and reduce its federal budget as it is expected to boost domestic savings.

Officially referred to as the Swiss confederation, Switzerland follows the federal system of government where it is constituted of twenty three Cantons. It falls within central Europe bordering France to the West and Germany northwards. Health indexes collected in 1994 revealed that the countrys life expectancy stood at 78.8 years with an excellent record with regard to infant mortality rate that was placed at five in one thousand live births. At the forefront of its causes of death were neoplasms which were estimated to cause 182 deaths per every 10,000 population unit and ischemic heart disease with a standard death rate (SDR) of approximately 100 together with cerebrovascular diseases which accounted for 48.8 of death. 57.8 per a ten thousand population were attributed to external causes (European Observatory on Health Care Systems, 2000).
The federal government in Switzerland is charged with the fight against communicable diseases of both humans and animals. This government duty is further exemplified through legislated ordinances. In addition, the government is also responsible for promoting sports as well as exercise and the provision of social insurance. Accreditation of medical practitioners and enhancement of scientific research, tertiary education, transplant medicine, genetic engineering and reproductive health are all placed under the governments arm. Lastly the government is also charged with compiling statistics on health, compelling employers to make the work place secure for workers and protecting the environment (Swiss Federal Office for Public Health, 1999).
The healthcare system in Switzerland is both liberalized and decentralized. As such providers are at liberty to locate at a place of their own choosing. The citizenry are also at liberty to select their choice of providers within a canton. Medical institutions are only eligible for re-compensation for services that are clearly stated within the compulsory Health insurance policy. The primary benefits list which constitutes mandatory services of the health insurance policy are all exemplified in law. Cantons such as Basle and Zurich have a legal backing to tame oversupply of doctors by invoking this clause upon universities to implement aptitude tests to students seeking to study medicine. The Swiss Federal Department of Home Affairs are mandated to select medical drugs constituted in the mandatory health insurance together with their price.
One aspect that the US health care system can borrow from the Swiss system is the policy of one price. Under the Swiss system everyone contributes the same for the compulsory health insurance (400 francs). This is irrespective of ones salary. In America though the healthcare offered was of utmost quality the price that one has to pay for those services is dear. This is likely to gain the poor who are engrossed in extremely burdensome medical conditions. A case in mind is the one of a Swiss family that was living in America but couldnt afford the quality but expensive medical program in Washington to their daughter who was suffering from juvenile schizophrenia. They relocated to Zurich and paid cheaply for the best that the system could offer their daughter in a facility specially formulated for young psychotics. There costs were covered by the Insurance. This would be practically viable for the US as poor people who can not sustain themselves in its expensive healthcare system will at least have an option while the rich who consider the offered services beneath them will still have the option of going to seek the sophisticated and efficient care.
Under Switzerlands law insurers are restricted from running the healthcare insurance as a business on the primary healthcare plan. Its citizens however are at liberty to reset their premium upwards or downwards by choosing an increased or reduced perennial deductible ( HYPERLINK httpwww.npr.orgtemplatesstorystory.phpstoryId2101102 Rovner 2008). The individuals are also allowed to join the formulated HMO-type which primarily is allows them to roam within the system and choose a medical practitioner of their own liking in the network. If these are enacted within the American system it will enable citizens to select the doctors that they can trust.