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A Scenario All Economics should be Viewed

4/12/2014

 
Economics has many hundreds of factors that continuously change.  It is often hard to flush out the cause or effect of any one policy.  Data is often tough to collect.  The collectors or those that analyze data often do so looking to prove their world view.
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The Closed Off Small Town

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Let’s imagine a small closed island that is populated by 100 people.  Four groups of 25 each on different parts of the island.   For the purpose of evaluating different policies, we are going to have this consistent starting point.
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To make things a little more obvious, we are going to say that all trading happens only once a week.  This includes ordering services or renewing employment contracts.  After every change, we are going to understand how you and by extension, most others will change your/others behavior.  Would you buy more, sell more, save more, work more, change what you value, or forgo today for expected benefits tomorrow?  The study of economics is how will you and others change your behavior with changing circumstances.
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Matching America, let’s state that 60 people are working for the purpose of trade.  40 people are either retired, young and being educated or taking care of a family.  All the people do a certain amount of work just bettering their own lives such as cleaning and maintaining their house, property and themselves.
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Everyone trading uses their comparative advantage to create a product or service for others.  The 60 people trading are at different skill, experience, responsibility, and need levels.  There are 10 that are employers, 30 that are employees and 20 self-employed. 
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The Economy

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The starting point for every scenario is a $100x economy per week.  Everyone trading brings their products or services to the market to trade.  The following scenarios will always reset to this standard to eliminate so many factors changing at once.  We know that every change in any one factor can have small to large factors in others; however, resetting back to this base, brings things into focus.
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