An economic outcome is said to be efficient if the economy is moving in the right direction, especially when all the key components of goods being produced in an economy are well allocated to the users and the waste is kept to a minimum. To sum it up, if the distribution of the product is efficient enough that it almost eliminates wastage, then an economy is said to be efficient.
How is an economy described as efficient?
Economic efficiency is attained by the least possible cost for the production of a good or service; resulting in a good surplus in terms of profit. Economic efficiency stands on the pillars of the concept that resources are scarce. Economic efficiency is achieved by having allocative efficiency, distributive efficiency, and productive efficiency. The variable input of production largely depends upon goods being produced at the lowest possible rates.
An economic outcome is said to be efficient if the economy is directly proportional to the scarcity of resources. The efficient economy largely rests upon the concept of resources being scarce. This means that to have an economy functioning at the highest capacity; it is not necessary to have an abundance of resources but the proper allocation of the resources.
The Trump economy
“We built the greatest economy in the history of the world” ~ Donald Trump
The economy continued to accelerate under the tenure of Trump; following a trend that was formed during the Obama administration. The economy continued to cultivate an increase in the GDP while minimizing poverty by introducing more employment in the business sector. This all halted when the pandemic hit the nation. Due to the unforeseen incidents that followed the pandemic, the economy went under a recession, which America experienced for the first time since the Great Depression.
The economists and other business analysts designed many strategies to come out of the pandemic-driven crisis but all went in vain as the economy continued to take a nose dive due to the emerging health crisis in the country.
The Trump economy was positive during the first three years as many of the prospering Obama policies were followed during his tenure and Trump is not to be entirely blamed for the damage done to the economy.
The economy is efficient if the welfare quotient is high
The economy will be fruitful if all the key elements are working in the right direction as this will be needed to maximize the revenue by minimizing the cost and making it possible for the said distribution channels to operate efficiently in managing the output. The welfare of the people matters the most as they are the key participants of an economic epicenter. The wellbeing of the people of America has been jeopardized during the pandemic, no matter what claims Trump has made of getting the economy back in the right direction.
Trump’s trade and economic policies were erratic and inconsistent, which achieved nothing but criticism. They were not efficient enough to make the economy grow and prosper or deliver something fruitful in the long-run.