What is the importance of understanding the economy?

Question

Base on the economy system of America.

Answer 1

Economic success is what voters most want governemnts to deliver them. Presidents Coolidge and Carter were both thrown out after one term because of a depressed economy in election year.

Without economic understanding, policy-forming officials will have no way of deterring elected officials from doing stupid things hat look good but actually make matters worse, such as closing national borders to immigrants "in order to protect American jobs", or selling water to Californian farmers at low prices because, somehow, well they need it in the desert, don't they. Producer and worker vested-interest groups will be powerful even more than they are now, and the loser will be the consumer i.e. all of us.

Answer 2

A downsliding economy could result in catastrophe for the society. If the economy is bad for a country, there would be rise of unemployment, suicides, robberies, attacks on other cash-rich countries, and so on. So constant monitoring of the economy and formulation of good economic policies are essential.

Answer 3

Because they keep trying to control and stabilize it. If we don't understand it (and they don't seem to) they can't stabilize it. They have tried to adjust for depressions, recessions, inflation, high interest rates, unemployment rates. If you think about each decade since WW1 you can probably think of what the economy was like and possibly what government policy was related to it. A lot of the time it is too late when they finally figure out they don't know what they are doing.