ME Portfolio Project Essay Example | Topics and Well Written Essays - 2000 words

ME Portfolio Project - Essay Example In addition to this, the article examines three specific countries that were not within Europe during the historic transformation and how the business cycle performed compared to the ones within the European region. The outcome expectations of the study were that there would be an avenue that arises due to the changes made. This will therefore create new opportunities for the business cycle. This paper however is a critical analysis of the article. The paper looks at the economic principles that are found in the article and their overall significance on the entire business cycle. Five microeconomic indices are identified and each is defined and explained in detail giving out its economic impact on this scenario. After all this, the paper finally gives a conclusion on all the information and how it has affected the overall business cycle in the region. Economic principles related to the article There are many economic principles applied in this article, however for this particular pap er, only three will be discussed to come to a conclusion about the overall economic impact of these principles. The first economic principle seen here is the principle that people face trade off’s meaning that every action has an economic cost. This means that when one thing is implemented, then there is another that has been shorter down. So if one moves from selling tomatoes to selling onions then the economic benefits of selling tomatoes is gone. From the article, euro was adopted as a single currency to serve 17 different countries. This was a good move to enable trade to develop in the 17 countries and lead to a lot of opportunities. However before the introduction of the euro as a single currency to serve the entire region, each of the 17 countries had banks and other stakeholders who traded in force to make a living. This means that after the adoption of the euro, several of these opportunities were lost hence leading to a slight change in the overall business cycle es pecially for banks that play a major role in the economy of a particular country. This transition will also mean that most of the money exchange businesses will have to either face out or reduce due to the use of one currency over the entire region (Eichner, 2011). This makes the region harder to economically compare themselves with great economic giants like the US which has a lot of money exchange businesses. The second most prevalent economic principle is that the cost of something is what you give up to get it. This principle means that whenever we want something new, we do some changes, and then we have to undergo some costs that are exactly the same as what we are losing. This means that before the implementation of anything, we have to be sure that the cost of the new product is much more than the cost of the older product. In the article, the entire European region set up a common central bank to serve the entire region. This means that if before this each country had its ow n central bank then there functionalities were either removed or completely minimized. This will in fact have a direct impact on the entire entire region. The cost of having a single central bank comes at the cost of having to do away with some of