Hi @brieb, I enjoyed reading your insights and thoughts on this week’s readings. You had really great viewpoints, as well as expressed some of the same thoughts and ideas that I had. To start, you explained the multiplier effect and Bylund's examples very well. I appreciated how you used this quote,
“The multiplier is based on the concept of economic activity, that is on the production and exchanges that are made within an economy and for economic purpose. Increased activity, as it includes both voluntary trade for mutual benefit and production of goods and services (which, if sold, are valuable), is supposed to approximate value creation and therefore is directly linked with economic growth” (Bylund, 2016, p.77)
to support your understanding of the multiplier effect and how we see it in our society. You showed through this quote that when production and trade are successful, then purchasing of those products increases and business owners experience a multiplier effect. Not only are their goods purchased, but their goods become in high demand, profits are made, and we see growth in the economy. Also, your example of the carwash overhanging with your friends was an excellent example of this effect. You and I also both shared in our essays that the ripple effect influences our society in similar ways to the multiplier effect. Both concepts are similar because when people buy products there are multiple results as mentioned above, but we also see that there are positive ripple down effects for the people who sell items used in making the products, so it is beneficial for producers, sellers, and the buyer. Next, you discussed ineffective and effective regulation from chapter seven very clearly. We both agree how ineffective regulation does not bring change to the market and economy, while effective regulation does. As you mentioned, we often see this in our society today as businesses lean towards regulations and laws which work best for them. Lastly, you discussed prohibition in addition to these regulations and the effects they have on businesses. I agree that sometimes prohibitions and too strict regulations can have negative effects on businesses. Unfortunately, some businesses are not able to recover from either scenario because with prohibition there could possibly be an elimination of their product, or with regulations some are just too expensive to accommodate, and the business owner cannot afford to keep going. After reading your essay, I was able to gain a deeper understanding of these concepts and you did very well at discussing them.