APPLIED

ECONOMICS
What is Economics?

Economics is a social science concerned with the production,

distribution, and consumption of goods and services. It studies how
individuals, businesses, governments, and nations make choices on
allocating resources to satisfy their wants and needs, and tries to
determine how these groups should organize and coordinate efforts
to achieve maximum output.
Economics can generally be broken down into
macroeconomics, which concentrates on the
behavior of the aggregate economy, and
microeconomics, which focuses on individual
consumers.
https://www.investopedia.com/terms/e/ec
onomics.asp
 Economics is the study of how people allocate scarce resources for production,
distribution, and consumption, both individually and collectively.

 Microeconomics looks at the behavior of individuals and firms. Macroeconomics looks at

regional, national, or global aggregates.
 Economics is especially concerned with efficiency in production and exchange, and uses
models and assumptions to understand how to create incentives and policies that will
maximize efficiency.
 Economists formulate and publish numerous economic indicators to help study the
economy. These can also be very useful to investors to judge how economic conditions
will move markets and to guide investment decisions.
The aim of studying economics is to understand the decision
process behind allocating the currently available resources,
the needs always unlimited but resources being limited.
The economic and political systems of a country are closely
inter-linked and jointly determine the well-being of its
citizens.
Applied economics is the study of
economics in world situations as opposed
to the theory of economics. It is the
application of economic principles and
theories to real situations, and trying to
predict the outcomes.
Applying economics to the status of 
the economy of a country helps eliminate all
attempts to dress it up. In other words, applied
economics prevents making situations appear better
or worse than they are.
An economist, i.e., an economics expert, studied
applied economics at university.
Only with applied economics can a true and
complete picture of an economic situation or theory
emerge. Then, decision-makers can choose what to
do to move in the right direction from a current
position.
The so-called Golden Age of Infrastructure is upon
the Philippines. It is a period of sustainable growth
expected to create more jobs, more opportunities
and cut poverty. CNN Philippines presents, BUILDING
FOR THE FUTURE, a business forum featuring the
government’s economic managers.
Economics Basics – Demand & Supply
Demand and SupplyIt is perhaps one of the most fundamental tenets and provides a fundamental framework in
which to assess the actions of an economy.

Definition of Demand: Demand is the quantity of a good (or service) the buyers are willing to purchase at a
particular price.

Definition of Supply: Supply is the quantity of a good the sellers are willing to deliver at a particular price.
Meanwhile price is a result of the constant tug-of-war between the demand and supply.

And all other random things kept constant for a good (brand, quality etc.); higher the price— lower will be the
demand from the consumer (to save up for other purchases).
Higher the price, higher will be the supply from the
manufacturers (make hay while the sun shines!).
The former is called the law of demand, and latter is called
the law of supply.
Time also plays a huge role in a free-market economy,
more so in the case of entities in a competition to serve the
consumers. Stock-outs are no good for a supplier as it
affects the brand and the consumer can move elsewhere.
If there is an excess of demand, the producers have to
gauge the nature of demand first (seasonal, increasing
trend) to react in a swift fashion, to corner the market and
retain the existing customers.
The stable state of equilibrium in an economic system
makes the economy efficient, the suppliers are moving
their goods and the consumers are getting what they are
demanding.
The only point worth noting: the point of equilibrium is
ever-elusive and fluctuates like a wild boar in each minute
quantum of time.
 
 Participants in the Economy

Economic activity is spurred by production which uses natural

resources, labor, and capital. It has changed over time due to
technology (automation, accelerator of process, reduction of cost
functions), innovation (new products, services, processes, expanding
markets, diversification of markets, niche markets, increases revenue
functions) such as, that which produces intellectual property and
changes in industrial relations (for example, child labor being replaced
in some parts of the world with universal access to education).
A given economy is the result of a set of processes that involves its
culture, values, education, technological evolution, history, social
organization, political structure and legal systems, as well as its
geography, natural resource endowment, and ecology, as main factors.
These factors give context, content, and set the conditions and
parameters in which an economy functions. In other words, the economic
domain is a social domain of human practices and transactions. It does
not stand alone.
What Is Inflation?
□Inflation is a quantitative measure of the rate at which the
average price level of a basket of selected goods and
services in an economy increases over a period of time.
It is the constant rise in the general level of prices where a
unit of currency buys less than it did in prior periods. Often
expressed as a percentage, inflation indicates a decrease in
the purchasing power of a nation’s currency.
Understanding Inflation
As prices rise, a single unit of currency loses value as it buys fewer
goods and services. This loss of purchasing power impacts the
general cost of living for the common public which ultimately
leads to a deceleration in economic growth. The consensus view
among economists is that sustained inflation occurs when a
nation's money supply growth outpaces economic growth.
To combat this, a country's appropriate monetary authority, like
the central bank, then takes the necessary measures to keep
inflation within permissible limits and keep the economy running
smoothly.
 KEY TAKEAWAYS
Inflation is the rate at which the general level of prices for goods and services is rising and,
consequently, the purchasing power of currency is falling.
Inflation is classified into three types: Demand-Pull inflation, Cost-Push inflation and Built-In
inflation.
Most commonly used inflation indexes are the Consumer Price Index (CPI) and the Wholesale
Price Index (WPI).
Inflation can be viewed positively or negatively. Individuals with tangible assets, like property
or stocked commodities, may like to see some inflation as that raises the value of their assets.
People holding cash may not like inflation, as it erodes the value of their cash holdings.
Ideally, an optimum level of inflation is required to promote spending to a certain extent
instead of saving, thereby nurturing economic growth.
PROGRAMS ACROSS THE WORLD
ADDRESS POVERTY IN THE PHILIPPINES
Despite the rising economic growth rates in the Philippines, poverty in the Philippines
continues to prevail nationwide. According to the Asian Development Bank (ADB), 21.6
percent of Filipinos live below the national poverty line.

There are many factors that create and maintain the cycle of poverty in the Philippines.
Unemployment is one of the main reasons that poverty reduction has not kept up with
the country’s growth. Alongside an increasing population, job resources remain
insufficient for millions of Filipinos.

The Philippine poverty condition remains a challenge due to the government’s lack of
capacity to establish sustainable poverty reduction programs. Governments from other
countries, alongside international institutions, have implemented strategies aimed to
tackle the Philippine poverty crisis. These programs share the common goal of alleviating
poverty in the Philippines by addressing unemployment in the country.
The World Bank
The World Bank plays a large role in working towards eradicating poverty
in the Philippines. One of the projects financed by the World Bank is the
‘Philippine Rural Development Project.’ The goal of the project is to
create greater work opportunities for Filipinos in the rural areas by
supporting farmers and fishermen through improving their access to
markets.
The United States of America
USAID has established the Philippine-American Fund (Phil-Am Fund) as a
strategy to tackle poverty in the Philippines. One of the program’s objectives is
to develop solutions to the country’s economic challenges. The Phil-Am fund
financially supports Philippine organizations to support business start-ups.
This strategy to address the poverty crisis promotes entrepreneurship by
offering a self-sufficient facility for citizens who do not have the capacity to take
part in the province’s economic activities.
As of last year, the Phil-Am fund has managed to support the establishment of
start-up businesses, provide training in standards for food-related
establishments and has integrated more efficient farming technology in the
Philippines.
Australia
Australia’s foreign aid to the Philippines includes ‘The Philippines’ Sustainable
Livelihood Program’ (SLP), which helps Filipino families by providing employment
assistance. The SLP also helps Filipino citizens start at enterprise — an approach that
encourages self-sufficiency.
Australia’s aid program aligns with the Philippine government’s goal to tackle poverty
and promote development. Sustainable livelihood is the primary goal of this program,
and includes micro enterprises, skills training and pre-employment assistance.
Filipinos who take part in this program have agency and decision-making responsibilities
by providing access to microenterprise development and employment. SLP has become
an efficient platform for productivity and development and since its establishment in
2011, SLP has achieved 97 percent of targeted program participants.
Gov't livelihood program alleviates poverty

BORONGAN CITY, September 27 (PIA) -- The government's livelihood program

dubbed Sustainable Livelihood Program (SLP) under the Department of Social
Welfare and Development (DSWD) alleviates poverty for Pantawid Pamilyang
Pilipino Program (4Ps) in Hernani, Eastern Samar.
According to Denise Jo O. Glino, Hernani Municipal Link, the DSWD is the
reinforced commitment of the government to alleviate poverty and empower
the disadvantaged sectors through the provision of appropriate interventions.
There are some 542 Pantawid Pamilya members and about 124 Modified
Conditional Cash Transfer (MCCTs) beneficiaries in Hernani town.
Under the SLP, beneficiaries are given the option to register in either micro-enterprise
development track or the employment facilitation track after participating in social
preparation and capacity building activities.

Glino said they organized some 25 members in every barangay. Most recipients
ventured into a micro-enterprise where they formed an association called “Bigasan ng
Barangay".

After the social preparation and capacity building activities, beneficiaries were given
P10,000.00 for every member which will serve as a capital for their micro-business.
Merlita V. Anos, resident of Barangay 4 also a parent leader, said when DSWD introduced the livelihood
project in their barangay, she was inspired to join the organization, tried to participate in the activities
actively and encouraged other residents to join the group for a chance to change their lives.

Their group opted to venture into a 'Bigasan ng Barangay.'

Anos immediately formed a group of 29 members from the 4Ps, the total capital they received was
P290,000.00. The said money they used in the rice retail business which started on August 23, 2017.

Through her leadership and the group’s unity and perseverance, the livelihood project has grown into a
grocery store. Each member is able to earn dividends that help them slowly improve their quality of living.

Anos admitted, "Like any other livelihood association, ours encountered several challenges during the
implementation of the project,” but added, "Somehow, we surpassed the challenges and emerged as better
persons."

Presently, Anos claims that their business is quite improving.