The Changing Global Economy Assignment Example | Topics and Well Written Essays - 5250 words - 1

The Changing Global Economy - Assignment Example It is evidently clear from the discussion that Economies of Scale in micro-economics are defined as cost advantage that an enterprise enjoys with increasing scale as the cost per unit of output generally declines. Operating efficiency is also increases with economies of scale. The biggest challenge against the free market is the fear among the citizens about outsourcing. This is getting very dangerous every day in the United States. Other nations if follow this trend then the world can enter into the black days of protectionism again. And the loss for the global economy will be huge. Every day United States news broadcasters are telecasting fearsome news that millions of high paying middle-class jobs are getting out of the country. Financial and technological firms are finding that they can outsource a work with a fraction of the cost from China, India or Malaysia rather than give it to an equally qualified United States employee. This put policy maker, a government in a stressful si tuation because United States citizens have already started their protest against outsourcing. That is the reason government now making policies that will prevent the outsourcing. According to Drezner, it is a publicity stunt done by the media to sell their news by scaring the citizens on their job. He also explained his ideas that American economy is a huge one with over 130millions jobs. And like when these jobs get out of the country at that time the equal number of job created in this country. This is called â€Å"Creative Destruction†. He explained that when a firm is outsourcing its jobs from another part of the world to minimize its cost, instead of pressing the alarm we need to calculate how many well paid and higher proportions jobs are creating for that reason. If we look at this profit and loss structure we never have to panic anymore. According to statistics during 2010 the number of jobs was shifted to developing nations are 220,000. These are all low paid and lo w-quality jobs but the numbers of high paid and high-quality job created in the United States are 22milions.