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  • Comparison and contrasts of the adoption of Walras’ ideas in the reinterpretation of The General Theory

    Macroeconomics Introduction The General theory of microeconomics originally developed by Keynes in 1936 epitomizes the essence of monetary value in an economy. The theory postulates the relationship between employment and the purchasing power of a populace in relation to their contribution to the development of recession in an economy. It is factual that money is an important factor in any economy, employment which is the key introducer of money in an economy thus becomes equally important with any factor affecting employment thus affects recession in an economy by extrapolation. Several renowned economists adopted later adopted the theory introducing their own understanding and inclusions, key among such were Clower and Leijonhufvud.…

  • Globalization and the Current Crisis

    For the International Monetary Fund, globalization also means that information and knowledge get dispersed and shared. However, it is important to stress that developments in the globalization process have made the dispersal and sharing of information at a very fast speed. This implies that speculation, as we well as transmission of fears, overreaction, both optimism and pessimism, and shaping of expectations, takes place at a very fast speed. At the same time, according to the IMF, the world’s financial markets have experienced a dramatic increase in globalization in recent years. Global capital flows increased from 2% of the world GDP in the 1980s to 14.8% at $7.2 trillion. Developed countries…

  • Impacts of Money Supply Inflation and Exchange Rate in Kuwait

    It is majorly a state dictated economy and it maintains a pegged exchange rate against a basket of currencies.It is surprising to note that 9% of the entire world’s crude oil reserves lie within the relatively smaller geographical boundaries of this nation. Thus, understandably, 50% of GDP, 90% of exports and 95% of the Governments revenue are attributable to Petroleum in Kuwait. The economy, however, does not have any arable land and additionally, its water resources are also very scarce. So, there is not much scope of primary production in Kuwait. However, since it is abundant in one of the most essential resources in the world, Kuwait has retained its…

  • Intermediate macroeconomics

    Intermediate macroeconomics Business cycle refers to the fluctuations in the economic activities taking place in the economy over a period of time. Business cycle undergoes four basic stages namely recession, trough, recovery and peak or boom. Recession refers to periods of contracting economic activities characterized by low production and unemployment level. Trough is a period of stagnant economic growth. Recovery is the above-average economic growth period while the peak marks the highest level of economic growth in which the economy is at full employment. NBER defines recession as a significant decline in economic activities over a given period of less than few months expressed in real GDP or income level.…

  • Hayek and alfred marshal

    Hayek The reconstruction of society based on rational lines is the of critical discussion today. While it has been long believed that rationality and order are the best ways to shape the society, the issue of socialism has been underresearched. Especially, its economic aspect needs to be clarified. Namely, the problem here arises when a few purposes start competing for the resources that are available. Prices and cost influences the decision making on how and what exactly to produce. Functioning of the price system is one of the ways to solve existing economic problems. While the price system has the disadvantages of its own, it’s should still be thought of…

  • Writing Assignment 3

    Writing Assignment Lecturer: Economic growth entails an increase/expansion in capa of a country to produce goods and services. It may be determine by making a comparison between the Gross National product for the current year with that of the previous year. On the other hand, Long run economic growth entails a period of growth where aggregate demand and supply tend to increase. The biggest factor that is responsible for long-run economic growth is technological innovation and creativity (Coombs amp. South Australian Centre for Economic Studies, 2001).2). Market interest rates entail the cost incurred by the investor/borrower whereby, the borrower pays back the principle amount and additional cost for borrowing (interest…

  • GDP and the circular flow of income and expenditures

    roductivity, expenditure, or income (gross domestic product of a nation) (Ouanes, Abdessatar, Subhash, Thakur, Lienert, Marciniak and Swiderski, 1997, p.87).Consumption is a primary concept in economics, and many other social sciences also study it. Economists are very much interested in the relationship that exists between income and consumption. According to some economists, consumption entails the final purchase of goods and services by individuals. Other economists define consumption in a much broader manner. They define it as the aggregate of all economic activities that does not include the design, marketing of goods and services and production. An example is the adoption, selection, use, disposal and the recycling of the services and…

  • Application for a Vacancy to Pursue an MBA in George Fox University

    There are several reasons why I have chosen to obtain an MBA from George Fox University. My interest in obtaining an MBAI am interested in obtaining an MBA as a way a channel for augmenting my knowledge of the business world. Given my undergraduate training in media, an MBA will be ideal in introducing and equipping me with ample knowledge of business. My interest in obtaining an MBA is also underpinned by my desire for leadership and personal development. I understand that the program has academic units and involves activities that are integral to personal development. This is particularly effective because the study of the program involves experiential learning that…

  • Micro and Macro Economics

    HERE YOUR HERE HERE HERE Micro and Macro Economics Economics is studying the of the world and why it operatesin the fashion that it does. It is a study of how firms make decisions about their work, consumer-related consumption patterns, how investment occurs, and about the pricing of products and services. Economics is about understanding how the costs of virtually everything, including consumer products and the costs associated with decision-making, such as opportunity costs. Economics studies the relationship between market investments, interest rates, and other general finance issues as it pertains to a local economy or international economies and how all of these areas function or work together. Economics considers…

  • A policy of discretion gives central bank the ability to react to news about the economy In this light discuss whether discretion is a better way to run monetary policy than following a rule

    The econometric discretion policy evaluate on fiscal and monetary policy by using the new rational expectation method of macroeconomics. This has been the substantial subject cause for increased recent year’s research. A number of factors have provided a motivation for the research.The critique of Lucas showed that traditional discretion econometric policy was flawed in its evaluation. This was supported by the fact that recognition of rational expectation is not an implication of monetary policy effectiveness as was being potted by the discretion policy. On the other hand, the finding that credibility has significant benefits which are empirical and the demonstration of time inconsistency is a blatant proof that policy rule…

  • The likely effects of the 201011 debt crisis* in the eurozone

    In light of the mechanisms at the disposal of authorities across the Eurozone in dealing with the crisis, three recurrent economic tools come into focus than ever before.These economic tools for consideration are the exchange rates, trade balance and interest rates that determine governments’ decisions in financing their budgets for instance through debts. In the incorporation of the appropriate balance to deal with the debt crisis, Mundell-Fleming Model forms one of the most applicable interventions in debt macroeconomics that could be applied to resolve the Eurozone crisis. In this discourse, various perspectives are discussed to form the basis of possible intervention by a European state outside the Eurozone which is…

  • 1 ) The Following Table Gives Categories For Income And Expenditures For A Representative​

    Net exports of goods and services – 550 Net interest paid by business 440Government purchases of goods and services 1,650Gross private domestic investment 2,200Indirect business taxes 440Rental income of individuals plus implicit rent on owner-occupied housing 220Wages, salaries, employee compensation 6,600Personal consumption expenses 7,700Depreciation 880Proprietorial income 1,100 Corporate profits 1,320 Macroeconomics

  • Australia Is A Small Open Economy With A Flexible (Floating) Exchange Rate System Use The

    Question 2.Australia is a small open economy with a flexible (floating) exchange rate system. Use theMundell-Fleming model (i.e. the open-economy IS-LM-IP model) to analyse what willhappen to income, the exchange rate, and the trade balance (net exports) in response to thefollowing shocks. Carefully explain the adjustment process in each case.a) A significant fall in the foreign demand for Australian minerals export.b) The Abbott government implements a fiscal expansion program, other things heldconstant, and the Reserve Bank of Australia keeps the interest rate fixed.Macroeconomics

  • Question 3 (16 Points) Assume The Following Model Of The Economy With The Price Level Fixed At 1 C =

    Question 3. (16 points) Assume the following model of the economy, with the price level fixed at 1:C= 0.8(Y -T)T= 1,000I= 800 -20rG= 1,000Y=C+1+GMS/P = M/P= 0.4Y -40rM = 1,200a.(3 points) Write a numerical formula for the IS curve, showing Y as a function of ralone. (Hint: Substitute out C, I, G, and T.)b.(3 points) Write a numerical formula for the LM curve, showing Y as a function ofr alone. (Hint: Substitute out M/P.)C.(5 points) What are the short-run equilibrium values of Y, r, Y-T, C, I, privated.saving, public saving, and national saving?(5 points) Assume that G increases by 200. By how much will Y increase in short-run equilibrium? What…

  • The Following Question Is About The Longrun Economic Growth

    a) Consider the following Question I. The following question is about the long-run economic growth. a) b) Consider the following equation of the neoclassical (Solow—Swan) growth model:NC = sf (k) — (6 + n)k . Explain in words what you understand by this equation and represent it on a diagram. Assume that a large portion of the capital stock in a country has been destroyed due to a war. Show, using the diagram, how this country can grow over time and reach thesteady state, even in the absence of technical progress. In answering this question,assume that the saving rate and population remain constant. Suggest slome government policies that would foster…

  • Contrast Say’S Law With Keynes’ Law

    olgtltligtContrast Say’s Law with Keynes’ Law. Do they provide completely different interpretations of Question olliContrast Say’s Law with Keynes’ Law. Do they provide completely different interpretations of macroeconomic behavior? Provide examples and explain your answer./li/ol Macroeconomics

  • Foundations Of Macroeconomicsaggregate Demand And Aggregate Supplyin The Economy When

    Question Foundations of Macroeconomics Aggregate Demand and Aggregate Supply In the economy, when interest rates are increasing _______. A. decreases the opportunity cost of future consumption, but has no effect on the opportunity cost of present consumption. B. increases the opportunity cost of future consumption, but has no effect on the opportunity cost of present consumption. C. reduces the opportunity cost of future consumption D. reduces the opportunity cost of present consumption Business

  • The Distinction Between Consumption And Investment Is A That Only Households Consume And Only Businesses

    Question .The distinction between consumption and investment is: A. that only households consume and only businesses invest. B. somewhat arbitrary, since investment includes housing investment, which does not increase future productive capacity. C. that investment always increases future productive capacity, while consumption does not. D. arbitrary, since the same expenditure may be counted as a consumption item in one year and an investment in another Macroeconomics

  • 10% What Would The Impact Of The Price Increase Have On The Number Of Soccer Balls Sold And Total Revenue?

    olgtltligtDicks research department estimates elasticity of demand for soccer balls in the store to be Question olliDicks research department estimates elasticity of demand for soccer balls in the store to be -1.5. If each soccer ball delivered to the store costs $10, what is the optimal markup factor and the optimal price that would maximize your profit?/lili if you raised your price by 10%, what would the impact of the price increase have on the number of soccer balls sold and total revenue? /li/ol Macroeconomics

  • A Firm Is Producing 1 000 Units Of Output With 40 Units Of Labor And 30 Units Of Capital The Marginal Product Of

    Question A firm is producing 1,000.units of output with 40 units of labor and 30 units of capital. The marginal product of the last unit of labor and capital are, respectively, MPL= 60 and MPK =120. The prices of labor and capital are, respectively, w =3= and r = 40. a. At the combination of inputs the MRTS is ________________( greater than, less than, equal to) the input price ratio, w/r. b. The firm can increase ____________ by one unit while reducing ______________ by __________ unit(s), and keep output constant. This will reduce cost by $ ___________ . c. To minimize the cost of producing 1,000 units of output the…

  • How Would An Increase In The Supply Of Labor Affect The Natural Level Of Employment And Potential Output? How

    Question –How would an increase in the supply of labor affect the natural level of employment and potential output? How would it affect the real wage, the level of real GDP, and the price level in the short run? How would it affect long-run aggregate supply? What kind of gaps would be created? – –Suppose the minimum wage were increased sharply. How would this affect the equilibrium price level and output level in the model of aggregate demand and aggregate supply in the short run? In the long run? –Explain the short-run impact of each of the following. A discovery that makes cold fusion a reality, greatly reducing the cost…

  • No Plagiarism

    No content from other students Classical economists belief that prices and quantities adjust to the changes in the forces ofsupply and demand and that the economy produces its potential output in the long run. On thecontrary,…Macroeconomics

  • Consider The Static Asad Model Suppose The Actual Price Level Is Less Than The Price Level Individuals Expect

    Question Consider the static AS-AD model. Suppose the actual price level is less than the price level individuals expect. Which of the following is true? (a) output is currently less than the natural level of output (b) the AS curve will tend to shift up over time (c) the AD curve will tend to shift up over time (d) the nominal wage will tend to increase as individuals revise their expectations Macroeconomics

  • Economics Is Best Defined As The Study Of How?Select One A The

    Question Economics is best defined as the study of how? Select one: a. the government should deal with unemployment and inflation b. individuals decide to use scarce resources in an attempt to satisfy their unlimited wants c. to make money d. to run a business e. to eliminate the problem of scarce resources Macroeconomics

  • May 2016 1econ1000 Open Campusworksheet #1 (Covers Units 1 To 5)

    Question 1 Classify Question May 2016 1 ECON1000 Open Campus Worksheet #1 (Covers Units 1 to 5) Question 1 Classify the following as microeconomics or macroeconomics and provide a justification for your choice. (a) Research into why the growth rate of total production increased. (b) A theory of how consumers decide what to buy. (c) An analysis of IBM’s share of the personal computer market. (d) Research on why interest rates in a country was unusually high. (a) The local pizza restaurant is advertising a special. If you buy one individual sized pizza, you get the next one at 25% off, the third one for 50% off and the fourth…

  • Consider The Basic Solow Model With

    Question Consider ye K 1/ 3 2S = 101.y = (K ) 1 3= 4 13J = 31.at steady statef (k )k= 10* 1/ 33103/ 2(as The capital share of national income: 2sue)y = * 13 / Y = K 13 2 2 3( b )Themarginal product…Macroeconomics

  • One Method Of Conducting Quantitative

    easing is the central bank: purchasing long-term Question One method of conducting quantitative easing is the central bank: purchasing long-term government bonds to increase long-term interest rates. purchasing long-term government bonds to lower long-term interest rates. selling long-term government bonds to decrease long-term interest rates. selling long-term government bonds to lower long-term interest rates. purchasing short-term government bonds to lower short-term interest rates.Macroeconomics

  • Hi Tutorhow To Solve These Question?Find The Golden Rule Capital Stock And Add It To

    Question hi tutor how to solve these question? Find the Golden Rule capital stock and add it to your graph in solow model. (Note: you need to maximise consumption per worker.) Calculate: (Please show the entire calculation process) • capital per person, y∗ g • output per person, k∗g • consumption per person, c∗ g • investment per person, i∗g thank you 🙂 (+ + It = Yt = F ( kt, it )It = KEH – (1-8 ) kt.( i-e. KTH = SPIKE, L ) + (1-8 ) KE )KTHIt = $ Elkt, It )steady – state :k*kt – KEH.je. K* = KTH = kt.RX .7 xxAt steady- strate…

  • Which Of The Following Is Correct As An Interpretation Of The Keynesian Consumption Function?

    a. The Question Which of the following is correct as an interpretation of the Keynesian consumption function? a. The Keynesian consumption function states that as income increases consumption increases more than proportionately. b. The Keynesian consumption function implies that your consumption depends on your overall wealth, rather than your current income. c. The Keynesian consumption function predicts that if your current income is less than your expected future income, you should borrow today to finance your current consumption needs. d. The Keynesian consumption function is consistent with the observation that consumption can increase even if disposable income remains the same. Macroeconomics

  • Please Help Me Out Of The Following 6 Questions

    1. Suppose an earthquake Question b. For the case, where there are 2 steady states, show graphically how the transitional dynamics for this economy are. Namely, suppose you start to the left of the low steady state capital stock, what happens? What about to the right? 6. Suppose total National Savings, St, is St= sYt – hKt. The extra term -hKt reflects the idea that when wealth (as measured by the capital stock) is higher, savings is lower, (i.e., wealthier people have less need to save for the future). Assume that production is given by the Solow model without technological change. Solve algebraically for the steady state capital stock. Show…

  • This Is My Work And No I Do Not Intend To Submit A Tutor’S Work As My Own I Did Research As Well My The Selected

    Question This is my work and no I do not intend to submit a tutor’s work as my own. I did research as well my the selected reading. However, to MY understanding multiple choices can be placed to one choice but it’s stated that only one goes to each scenario. I’m really confused and need help. Each scenario below practices one of the 12 Principles of Economics. Match the principles to the appropriate scenario listed and justify your answer. A principle will only be used once, and not all principles are used. The 12 Principles of Economics: 1. People must make choices because resources are scarce. 2. The opportunity cost…

  • After California Was Hit By Deadly Forest Fires The Price Of Construction Materials Like Question 1

    After California was hit by deadly forest fires, the price of construction materials, like Question 1. After California was hit by deadly forest fires, the price of construction materials, like plywood, in the southern California tripled in price. In response to customer complaints of ‘price gouging,’ the government considered imposing price regulations to insure that plywood would be sold at the same price that prevailed prior to the devasting wild fires. Present a discussion, along with a graph, that identifies whether most economists would agree with this proposed action by government. Macroeconomics

  • Hello I Need Help Figuring Out How To Solve This Question It Was Seen In Class But My Professor Didn’T Explain

    Question Hello, I need help figuring out how to solve this question it was seen in class, but my professor didn’t explain how to get 2-4 so I am stumped. The question is found below: Consider the following numerical example using the Solow growth model. Suppose that F(K, N) = zK 2/5N 3/5 where the capital depreciation rate is d = 10%, the savings rate is s = 0.25, the population growth rate is n = 7.50%, and the productivity is z = 1.5 1. Find the steady state per-capita capital stock (k*), output per capita (y*), and consumption per capita (c*). 2. Assume the economy is in the steady…

  • 1 Suppose An Economy Is Experiencing Higher Inflation Rate As Well As A Recessionary Gap Using The Policy

    Question 1. Suppose an economy is experiencing higher inflation rate as well as a recessionary gap. Using the policy reaction function, explain whether the Reserve bank will increase or decrease the interest rate? 2. Explain the effect of an increase in imports on the equilibrium output and inflation in the AD-AS model. Carefully distinguish between the short run and the long run. Would this affect the potential output? Why/Why not? 3. Suppose capital in Country A increases from 100 in 2017 to 200 in 2018. Explain the effect of this increase on real GDP, real GDP per capita and average labour productivity Macroeconomics

  • My Problem And Answer Is Posted Below My Question Is

    Is output ambiguous and is the relation to investment then Question My problem and answer is posted below. My question is; Is output ambiguous and is the relation to investment then also ambiguous? Problem: Use the IS-LM model to answer this question. Suppose there is a simultaneous increase in government spending and reduction in the money supply. Explain what effect this particular policy mix will have on output and the interest rate. Based on your analysis, do we know with certainty what effect this policy mix will have on investment? Explain. — Answer: Taking each piece independently: An increase in government spending would be a fiscal expansion that would shift…

  • Suppose That France And Denmark Both Produce Fish And Olives France’S Opportunity Cost Of Producing A Crate Of

    Question suppose that France and Denmark both produce fish and olives. France’s opportunity cost of producing a crate of olives is 3 pounds of fish while Denmark’s opportunity cost of producing a crate of olives is 11 pounds of fish. By comparing the opportunity cost of producing olives in the two countries, you can tell that has a comparative advantage in the production of olives and has a comparative advantage in the production of fish. Suppose that France and Denmark consider trading olives and fish with each other. France can gain from specialization and trade as long as it receives more than of fish for each crate of olives it…

  • When The Central Bank Controls The Interest Rate A Rise In The Price Target Will In The Short Run

    Question When the central bank controls the interest rate, a rise in the price target will, in the short run, cause: Select one: a. an increase in the nominal wage. b. the wage setting curve to shift downward. c. the AD curve to shift leftward. d. the price setting curve to shift down. e. the wage setting curve to shift upward. A comparison of the average growth rates for the periods 1970-2006 and 1996-2006 for Australia indicates that: Select one: a. the recent increase in average growth rates is due to large increases in capital formation. b. the average growth rate has increased in the more recent period. c. the…

  • My Question Please Read The Question And Answer Below Plus See Attached I’M Wondering If We Know The Effect On

    Question My Question: Please read the question and answer below plus see attached. I’m wondering if we know the effect on investment or if it’s unknown? Question 1. Based on your understanding of the IS-LM model, graphically illustrate and explain what effect a reduction in consumer confidence will have on output, the interest rate, and investment. My Answer: Decreases in consumer confidence would shift the ZZ curve down to ZZ’ as shown below representing a decrease in demand and output.. The IS curve would shift left representing lower output and lower interest rate (as shown below). The effect on investment is unknown because investment is dependent on output and interest…

  • *The Question I’M Working On And My Answer Are Below My Question To You Is

    can output be restored by lowering Question *The question I’m working on and my answer are below. My question to you is; can output be restored by lowering the interest rate causing a downward shift in the LM curve and thus increasing output? Question: Graphically (i.e., using the IS-LM model) illustrate and explain what effect an increase in default-risk premium (x) will have on the equilibrium output. How can we restore the output to its original level following this change? Answer: Increase in default-risk premium (x) will make investing in assets riskier causing a decrease in investment demand. The IS curve shifts to the left showing interest rate and output…

  • My Question Is On ‘Part B’ Below I’M Wondering If I Picked The Right Numbers For Income Change And

    Question My question is on ‘part b’ below. I’m wondering if i picked the right numbers for income change and multiplier. thanks! 1. Suppose the United States economy is represented by the following equations: Z = C + I + G ; C = 500 + .5YD ; T = 600; I = 300; YD = Y – T ; G = 2000 a. Given the above variables, calculate the equilibrium level of output. Y = C+I+G = 500 + .5(Y-600) + 300 + 2000 =2500 + .5Y .5Y = 2500 Y = 5,000 Equilibrium level of output is 5,000 b. Now, assume that government spending decreases from 2000 to…

  • Read The Article By Carroll Requiem For The Representative Consumer? Aggregate Implications Of

    Question Read the article by Carroll Requiem for the Representative Consumer? Aggregate Implications of Microeconomic Consumption Behavior and answer the following questions. 1. What is heterogeneity? 2. What is homogeneity? 3. What is precautionary savings? 4. How does MPC change as the wealth level of consumers change? 5. What is representative consumer? 6. What is a typical consumer? 7. What is the difference in wealth level for typical versus representative consumers? 8. What is the difference between patient and impatient consumers? 9. Compare the wealth level of patient and impatient consumers (the same, different – based on the article) 10. What is idiosyncratic risk? Macroeconomics

  • The Law of Comparative Advantage

    Because the theory failed to understand the laws of absolute and comparative advantage, which advocates that trade, may not necessarily be a zero-sum game, mercantilists regulations were gradually removed in Britain in the course of the eighteenth century after the government has fully embraced Adam Smith’s concept of laissez-faire (Wikimedia Foundations, Inc). The greatest challenge to mercantilism was Adam Smith’s theory of absolute advantage. It is said that Smith’s publication of the book The Wealth of Nation in 1776 has ended the rule of mercantilism as an economic philosophy. In contrast to the necessity of government control in the mercantilists’ philosophy, Adam Smith advocated the laissez-faire system, with limited government…

  • If the demand for corn increases due to its use as an alternative energy source what will happen to the supply of corn’s substi

    The demand for corn The increase in the demand for corn due to its use as an alternative source of energy would have effects on the supply of other substitutes, such as soybean. There would be a reduced supply of soybean as the increase in demand of a substitute good. corn would ultimately lead to a decrease in the demand of soybean and a reduction in the supply of soybean. Thus, the increase in the demand of corn would lead to a decrease in the supply of soybean. The increase in the demand of corn is due to the fact that people have found it to be a very useful…

  • Supply and Demand

    Third, if demand remains unaffected and supply rises, there will be surplus causing a decreased equilibrium price. Fourth, if demand remains unaffected and there is a decrease in supply, there will be a shortage causing an increased equilibrium price. This paper will look at supply and demand. On the supply side, it will discuss Ronald Regan, and on the demand side, it will look at Franklin Delano Roosevelt (Caplin and Schotter 43). The paper will go on to highlight the difference between supply and demand while looking at the economic environment then and now, and other components such as interest rates, housing market, etc. Supply side economics is a branch…

  • Economics of Money and Banking

    Investments are a boon for the progress of any economy. This does not imply that the commercial banks would charge negative interest rates to the investors in order to boost up investment thresholds in the country. The banking institutions may offer loans at zero interest rates. Zero interest rate policy under taken by the central bank of a country is a situation where they charge a low nominal rate of interest (Woodford, 2001). This is associated with stimulating the economy, when the pace of economic development is low in a nation. Interest rates can never be negative, a negative interest rate charged on loans is a hypothetical state where the…

  • Introduction to Macroeconomics

    Moreover, there are always huge numbers of people that are self-employed and every one cannot increase their incomes in proportion to the inflation rate so a huge chunk of citizens suffer in this process. In a way, high inflation impacts living standard of the majority of the people. Impact on Interest Rates Bank interest rates get impacted due to high rate of inflation because banks need to enhance their deposit rates to attract the deposits from the public. moreover, this will also cause lending rates to go up. This puts producers and traders at inconvenience as their production planning process goes in turmoil impacting production, sales/marketing and other related functions.…

  • Macroeconomics Theory

    Foreign exchange rate is the price of one currency in terms of another currency. BOP has direct relation with the foreign exchange market as the spending of the consumer depends on the value of currency in other countries. Under the free-floating currency regime (McGregor) the balance of payment depends highly on the forces of supply and demand. In this free-floating regime, the price of the currency automatically adjusts according to the requirement which equals the supply and demand of the currency. This shows that in this market conditions, price automatically is in equilibrium in the balance of payment. There is no intervention by the government due to which the outcomes…

  • EU crises from microeconomic point of view and future of EU

    European countries that have constituted the EU have also been set to operate under common currency. the euro, making economic transactions between and among member states easy and favorable. This is more so because the member states do not face currency fluctuations in terms of foreign exchange, making international business prior to the member states favorable across the EU region. Though the current notion of the EU sounds simple in the domain of other countries in the world, the history behind the formulation and implementation of the EU is rich. The establishment of the European Union was not easy, taking into account that it required prior organization and unique treatment…

  • Macroeconomics EC 211

    Macroeconomics Assignment EC 211 QUESTION ONE – PERCENTAGE GROWTH IN NORMINAL AND REAL GDP for the years 1991 – 1997 YEAR Real GDP (in billions of Dollars per Year)Nominal GDP (in billions of Dollars per Year)% Growth in Real GDP% Growth in Nominal GDPU.S. Population (in Millions)Real GDP per Capita19906,136.35,743.8——-249.924,555.0219916,079.45,916.7-0.9%3%252.624,067.319926,244.46,244.42.7%5.5%255.424,449.4919936,389.66,558.12.3%5%258.124,756.319946,610.76,947.03.5%5.9%260.625,367.219956,742.17,255.41.9%4.4%263.025,635.3619966,928.47,636.02.8%5.2%265.526,095.6619977,191.48,083.43.8%5.9%267.926,843.59Real GDP per Capita is the Total GDP dividend by the whole population of the country. GRAPH THE GRAPH OF THE % Growth in Real GDP AND % Growth in Nominal GDP FOR THE YEARS 1991 – 1997QUESTION TWO Figure 1THE RELATION BETWEEN THE UNEMPLOYMENT RATE AND THE % CHANGE IN THE REAL GDP FOR THE YEARS 1981 -1995QUESTION 31. What…

  • Business cycle

    HW4b Calibrated Business Model Calibrated business model is a concept applied to the selection of constraint values due to macroeconomic confirmation and compares the model’s calculations concerning the variances and co-variances of different series with those in the statistics (Romer 217-220). The methodology entails the estimation of casual or unrelated variances, which are quantified to confirm the existence of a historical data. This implies that the model uses real-business concepts against empirical values to ascertain the various sequences in the data. Calibration imposes models on macroeconomic disciplines for planning purposes and the detection of errors. For instance, the choice of the parameter values depends on the macroeconomic evidences available for…

  • Macroeconomics

    Macroeconomics – Economic Growth The Chinese economy has been identified by a rapid growth within the past decade. Its advancements have been driven by wages, increased consumer markets and investments (China Central Television 2014). Other factors include social, political, technological and economic factors. However, leadership has been the key factor that has led to economic development in China. It has adopted both capitalist and socialist ideologies in its economy. To initiate economic development from the countrys roots, China has focused on regional developments that later contribute to the countrys economy. Most of the regional developments have been caused by local and international investments. Research has placed China among the top…

  • Summary on the following 3 readings

    International relations Wright denies the existence of the theory of IR based on the principles of the methodology of the study of IR and the conceptual system that offers unified explanations of international occurrences. An initial glance according to Wright is that the speculation of relations among states is typically the scope of the political theory. As such, wrights propose various arguments against the existence of a theory in IR. Firstly, to be considered separate from mainstream political theory, it implies that theories of IR will have no classical bases making them be built away from pre-existent political theory thinkers such as Machiavelli and Plato. The speculation about the society…

  • Math project

    Monday Tuesday Wednesday Thursday Friday 8.30 ECO2142 C Macroeconomic Theory Francesca Rondina HGN 302 10.00ECO2142 CMacroeconomic Theory 1Francesca RondinaHGN 30211.30ECO 1102DIntroductionto MacroeconomicsDavid GrayUCU AUD1.00ECO 1102DIntroductionto MacroeconomicsDavid GrayUCU AUD2.30ECO2117 CIntroduction to Economics of DevelopmentGeranda NottenTBT 333ECO 1302 A Contemporary Macroeconomics IssuesCBY C03ECO 1104 GIntroduction To MicroeconomicsGordon LenjosekART 0334.00ECO 1302 A Contemporary Macroeconomics IssuesCBY C03ECO 1104 GIntroduction To MicroeconomicsGordon LenjosekART 033ECO2117 CIntroduction to Economics of DevelopmentGeranda NottenTBT 333From the schedule above, I would not have early morning classes except for the Macroeconomic Theory 1 class on Thursdays. I chose these courses because of the timing of the classes, which makes my schedule flexible. My classes spread throughout the week with two classes…

  • In conditions of perfect capital mobility and floating exchange rate fiscal policy is likely to be ineffective while monetary policy may be effective in achieving internal and external balance

    This paper shall discuss the Mundell-Fleming Model as applied to a specific condition of floating exchange rates in an open small economy and perfect capital mobility, with special attention to how fiscal and monetary policies impact the macroeconomy. The writer shall attempt to test and explain the proposition that “fiscal policy is likely to be ineffective, while monetary policy may be effective, in achieving internal and external balance. "The Mundell-Fleming model uses the Hicksian IS and LM framework to analyze the effectiveness of fiscal and monetary policies for small open economies under fixed and flexible exchange rates, assuming perfect capital mobility. The seed of the model is found in his…

  • The Principles and Motivating Force of Microeconomics

    Microeconomics analyzes factors affect prices and how these prices affect the number of goods or services supplied to or from a given market. Moreover, Microeconomics also examines factors affecting the demand for certain goods and services within a particular market domain. On the other hand, macroeconomics often engulfs the sum total of all the economic activities related to economic growth, unemployment, and inflation. Notably, microeconomics often deals with economic policies that usually influence or affect a nation. Therefore, microeconomics is the aforementioned phenomenon of the economy. Some of the areas of the economy affected by microeconomics include the taxation levels of a particular country. For instance, the emergence of Lucas’s…

  • Wars and Interest Rates in the United Kingdom

    Wars and Interest Rates in the United Kingdom Mankiw gives an insight into the relationship that exists between interest rate and other macro-economic variables. With a view to the economic turbulence that United Kingdom has gone through especially during the wars in Europe between 1730-1920. It is important to note that interest rate is a common denominator as far as monetary and fiscal policies are concerned. Different schools of thoughts explain the feasibility of either monetary policy of fiscal intervention towards regulation of interest rate which in turn dictates level of investment versus savings. The classical approach takes investment to be a function of interest rate directly whiles the Keynesians…

  • Business Economics

    Business Economics Question One Among the very many benefits derived from capitalist economy in U.S. are the principles of equality and secondly freedom. U.S. upholds the rule of equality among its citizen with regards to services provision, the rule of law and justice. All these have contributed to a fair society where everyone has an equal share of the available resources and are treated with dignity. Furthermore the American freedom hit the bar to be paramount and highly profound. This creates a free community in which one does what he chooses to at will and this result to individual productivity and room for self-development to constitute the national economic development…

  • Introduction to Macroeconomics

    A single estimate is then derived and published as the official estimate of GDP. There are two ways to measure the GDP, Real and the Nominal. Every country uses estimates of GDP in real terms as the international standard to measure growth in an economy. It is essential to follow a common standard to allow meaningful comparisons between different economies. The United Kingdom follows the international conventions and European Union guidelines. This paper examines the GDP as a metric for measuring the health of an economy. It begins by analysing the distinction between the real and the nominal GDP and then goes on to elucidate the voids in using GDP…

  • East Asian Economic Growth

    5 1250 The global recession of 2008 also affected their economies, but their experiences in international trade are all worth studying because they derived much success in it. With these HPAE are subgroups such as the Four Tigers, namely Hong Kong, Singapore, South Korea, and Taiwan. Another group is the Newly Industrializing Economies (NIE) of Indonesia, Malaysia, and Thailand. China has a category all its own due to its size and communist influence. The NIE followed suit after the Four Tigers’ economies took off. Experts have analyzed how the HPAE have sustained their economic success and found that these countries were careful in maintaining stable macroeconomics. They also prioritized sharing…

  • Introductory Economics (Macroeconomics)

    If interest rates are forecasted to be low in an economy, then it makes productive investors believe that in the long run, cost of borrowing funds would be less. Under such circumstances, the rate of investments made in an economy would increase and level of economic productivity would also rise. Finally, a rise in the domestic product of a nation simply indicates a fall in unemployment rates. The Bank of England initially claimed under the regime of Forward Guidance Policy that it would not increase the lending interest rate above .5% in the long run, until the unemployment level in the country falls to 7% or below (BBC, 2014). Accordingly,…

  • Current events report and analysis

    Current events report and analysis Summary According to the estimates of the International Energy Agency the production of the oil of the United States has been on the rise. This increase in the production of the oil is much more than it was estimated by the economists. This has provided the company with a very strong capacity of oil. The consumption of the oil in the United States has also increased over the last year and the rate of increase is much more than that of the other large economies of the world. This increase resulted due to the increase in the demand in the petrochemical industries. As result of…

  • Macroeconomics Environment of Business

    112750 Moreover the population and area of India is much larger than the combined area of all countries under EU. On the other hand there is the example of USSR breaking up into 14 smaller countries. Ruble was the currency of a unified USSR, but now the newly formed countries have come out with their own currencies while still accepting Ruble. This system as working fine as well. In fact success of any unified currency depends largely upon the sincerity and integrity of member states. In the case of EU the member countries don’t have a history of fierce rivalry or enmity like between Israel and Palestine (or other gulf…

  • Chapter one

    Book Review Book Review Macroeconomics 3rd Edition The most important lesson from this book is the economic model of trade-off. As an economist, I would like to point out that trade-off is a very crucial concept in business. As Paul Krugman and Robin Wells exclaim, it can determine the success or failure of any investment. The chapter convinces me that it applies the principle of opportunity cost which of course, plays a significant role in the decision-making process. This applies both at personal, corporate or national level (Blanchard, O., 2000). I would like to say that the explanations given by these authors can be of great help to me. In…

  • Causes of Unemployment and the Economic Schools of Thought

    Unemployment prevalence is normally measured with what is normally termed as unemployment rate which is defined by expressing those out of labour force as a percentage of those who are in the force. More often than not the unemployment rate has been used in economic studies where it may be applied to measure the state of macroeconomics. This paper seeks to argue out the proposition that unemployment within the labour market is primarily voluntary. A number of causes for unemployment have been floated and these causes depend on the economic school of thought. The Keynesians and monetarists more often than not disagree on the causes of unemployment and as such,…

  • Monetary Policy (Macroeconomics)

    Reduction of the Federal Reserve’s Economic Value Program The reduction of the Federal Reserve’s Assets both in actuality and prospect has created substantial challenges to various emerging market economies. However, this change has been cited as inevitable in some case, but has caused huge criticism from various global markets. These changes are expected to have domestic as well as global impacts in economic systems (http://www.ny.frb.org, n.p). According to William Dudely, the President and the CEO of the Federal Reserve Bank of the United States, such abrupt economic policies have a significant impact on social development within United States. One of the impacts could result from a spike in Treasury yield,…

  • ECONOMIC FORECASTING AT Bank OF GREEN

    3rd July Economic forecasting at Bank of Green One of the major issues that are affecting the investors is the slow growth of GDP an aspect that results to low national demand as well as reduced consumers purchasing power. Additionally, the decline in the consumer confidence result to low demand for financial services implying that Bank of Green and Federal Reserve must take an action to restore the economy. In order to expand the investment thus increasing the job opportunities, the Federal Reserve must ensure that the Bank of Green has adequate funds to give as loan to the investors as well as customers. The bank Federal Reserve should make…

  • If the U S government tried to raise the rate of national economic growth much higher than the growth rate of the

    Question If the U.S. government tried to raise the rate of national economic growth much higher than the growth rate of the rest of the world’s economy, how would the international trade sector transmit inflationary pressures to the U.S. economy? If the rest of the world raised its growth rate to the high American level, would these inflationary pressures persist? Use supply and demand curves for the dollar to explain your answer. What do you conclude about the desirability of coordinating economic policies among trading partners? Macroeconomics

  • a)Assume that a society has two types of workers that lose jobs in a given year Society A has 2

    Question a)Assume that a society has two types of workers that lose jobs in a given year. Society A has 2 million workers losing their jobs; each person takes a year to find a new job. Society B has 24 million workers losing their jobs; each worker takes a month to find a new job. How many spells’ of unemployment occur each year in the economy? What percentage of the spells is only one month long? b)If you take all the unemployed workers each year and multiply each by the length of the unemployment spell, how many worker months’ of unemployment would there be in the economy each year? Of…

  • In an economy in which the multiplier has a value of 3 the price level has decreased from 115 to 110 As a

    Question In an economy in which the multiplier has a value of 3, the price level has decreased from 115 to 110. As a consequence, there has been a movement along the aggregate demand curve from $18 trillion in real GDP to $18.9 trillion in real GDP. A. What is the marginal prosperity to save? B. What was the amount of the change in planned expenditures generated by the decline in the price level? Macroeconomics

  • 6 People had been expecting the price level to be 140 but it turns out to be 138 Johnson Family Restaurants

    Question 6. People had been expecting the price level to be 140 but it turns out to be 138. Johnson Family Restaurants increases the number of workers it employs. What could explain this? a. both sticky price theory and sticky wage theory b. sticky price theory but not sticky wage theory c. sticky wage theory but not sticky price theory d. neither sticky wage theory nor sticky price theory Macroeconomics

  • 2 • An economy has a CobbDouglas production function Y=Kα(LE)1−α (For

    Question 2. • An economy has a Cobb-Douglas production function: Y=Kα(LE)1−α. (For a review of the Cobb-Douglas production function, see Chapter 3.) The economy has a capital share of 1/3, a saving rate of 24 percent, a depreciation rate of 3 percent, a rate of population growth of 2 percent, and a rate of laboraugmenting technological change of 1 percent. It is in steady state. a. At what rates do total output, output per worker, and output per effective worker grow? b. Solve for capital per effective worker, output per effective worker, and the marginal product of capital. c. Does the economy have more or less capital than at the…

  • As output increases after a recession which one of the following statements best describes what happens to

    Question As output increases after a recession, which one of the following statements best describes what happens to prices? Select one: a. As output increases, prices at first remain stable. As some resources begin to be fully employed, prices increase. But when the economy reaches full employment, only prices increase. b. As output increases, prices at first remain stable. As some resources begin to be fully employed, prices increase. But when the economy reaches full employment, prices become stable again. c. As output increases, prices at first remain stable; but at some point, they begin to rise proportionately. d. As output increases, prices increase proportionately Macroeconomics

  • 1)Assume that investment does not depend on the interest rate A decrease in government spending will cause which

    Question 1)Assume that investment does not depend on the interest rate. A decrease in government spending will cause which of the following for this economy? Select one: a. An increase in output. b. An increase in the interest rate. c. A decrease in investment. d. No change in investment. e. An increase in investment. 2)An increase in the aggregate price level, P, will most likely have which of the following effects? Select one: a. A rightward shift in the IS curve. b. A leftward shift in the IS curve. c. An upward shift in the LM curve. d. A downward shift in the LM curve. e. A downward shift in…

  • 2 • In the Keynesian cross model assume that the consumptionfunction is given

    Question 2. • In the Keynesian cross model, assume that the consumption function is given by C=120+0.8(Y−T). Planned investment is 200; government purchases and taxes are both 400. a. Graph planned expenditure as a function of income. b. What is equilibrium income? c. If government purchases increase to 420, what is the new equilibrium income? What is the multiplier for government purchases? d. What level of government purchases is needed to achieve an income of 2,400? (Taxes remain at 400.) e. What level of taxes is needed to achieve an income of 2,400? (Government purchases remain at 400.) Macroeconomics

  • ECC1100 1 In country A Tim bought a car for $40 000 in 2018 This

    Question ECC1100 1.In country A, Tim bought a car for $40,000 in 2018. This transaction would lead to a $40,000 increase in country A’s GDP in 2018. (Explain whether you agree or disagree with the statement. Give TWO reasons.) 2.If the price of bread increases by 10%, you will be necessarily worse off. Explain whether you agree or disagree with the statement. (What are the assumptions behind your arguments?) 3.Explain the effect of an increase in participation rate on unemployment rate. Macroeconomics

  • In the circular flow diagrama

    profit flows from the product market to the firms. b. revenue Question In the circular flow diagram a. profit flows from the product market to the firms. b. revenue flows from the resource market to the households. c. consumer spending flows from the product market to the households. d. consumer spending flows from the product market to the firms. e. consumer spending flows from households to the product market. Macroeconomics

  • Consider the economy of Hicksonia a The consumption function is given byC=300+0 6(Y−T) The

    Question Consider the economy of Hicksonia. a. The consumption function is given by C=300+0.6(Y−T). The investment function is I=700−80r. Government purchases and taxes are both 500. For this economy, graph the IS curve for r ranging from 0 to 8. b. The money demand function in Hicksonia is (M/P)d=Y−200r. The money supply M is 3,000, and the price level P is 3. Graph the LM curve for r ranging from 0 to 8. c. Find the equilibrium interest rate r and equilibrium income Y. d. Suppose that government purchases are increased from 500 to 700. How does the IS curve shift? What are the new equilibrium interest rate and income?…

  • The table attached shows total amount to build the swimming pool average costs total labor costs

    Question The table attached shows total amount to build the swimming pool, average costs, total labor costs and average labor costs that vary depending on the number of employees you hire for your pool company. 1. How do I calculate the total value of the 3 people, how was the value calculated? 2. What is the total labor cost with 4 people in the pool, and explain the method for the calculation. 3. Analyze the relationship between average benefits and average costs by filling in the blanks in the following statement: 4. If a another team wants to build the pool, as long as their average benefit exceeds their average…

  • 1)We would expect which of the following to occur when the central bank conducts an open market purchase of

    Question 1)We would expect which of the following to occur when the central bank conducts an open market purchase of bonds? Select one: a. A decrease in reserves. b. A decrease in the money multiplier. c. An increase in reserves. d. An increase in the money multiplier. e. A decrease in central bank money. 2)Which of the following will occur when the central bank pursues expansionary monetary policy? Select one: a. A rightward shift in the money demand curve and a rightward shift in the money supply curve. b. A leftward shift in the money demand curve and a rightward shift in the money supply curve. c. A rightward shift…

  • Which country has the absolute

    Question . Which country has the absolute advantage? b. Which country has the comparative advantage? c. Which country has a lower opportunity cost? d. Which country has a higher opportunity cost? e. What should the United States import? f. What should Australia export? g. What is the opportunity cost for the United States? h. What is the opportunity cost for Australia? SHOW ALL WORK! Macroeconomics

  • 1) Generally if a county(the domestic county) has a trade deficit if will correct itself

    Question 1) Generally if a county(the domestic county) has a trade deficit, if will correct itself by: A) the domestic currency getting weaker B) the domestic currency getting stronger C) using tariffs to slow the imports D) increased gov. Spending 2)inflation and unemployment are tradeoffs under which economic view. A) Neoclassical B) Isolationist C )Keynesian D) all of the above 3) increasing the requires reserves will: A) increase money supply B)decrease money supply C) Not affect the money supply D) you need the reserves on hand to answer 4)which of the following is a correct fiscal policy initiative during a recession? A)tax increase B) required reserve increase C)government spending increase…

  • Changes in the quantity of money lead to real changes in the economy If this is the case why would the central

    Question Changes in the quantity of money lead to real changes in the economy. If this is the case, why would the central bank ever stop increasing the money supply? Possible Answers: Although there is a short-run incentive to increase the money supply, these effects wear off in the long run as prices adjust and then drive up the value of money. The government has rules in place on the maximum amount the money supply can be increased in a given fiscal year. Although there is a short-run incentive to increase the money supply, these effects wear off in the long run as prices adjust and then drive down the…

  • Consider the following economic data to answer #1013

    Unemployment rate= 4% Inflation rate= Question Consider the following economic data to answer #10-13. Unemployment rate= 4% Inflation rate= 2% Actual GDP= $17 trillion Growth rate= 2% Potential GDP= $20 trillion Marginal Propensity to consume=.7 Based on the data, answer the following: (5) 10. What data indicate there is a problem and why? (2) 11. How much and what kind of gap is this economy experiencing? (3) 12. State a fiscal policy option to fix the problem. State a monetary policy option to fix the problem. (5) 13. How much must spending change to close the gap? Show your calculations. (Hint: don’t forget the multiplier effect) Macroeconomics

  • 4 Suppose that we have a standard Solow model with a CobbDouglas production function The central equation of

    4. Suppose that we have a standard Solow model with a. Cobb—[buglas produc—tion function. The central equation of the model is as follows: km 2 SAFE? + (l. – {guiltConsumption per worker is given by: q=[1-5)Akf. {a} Solve for an expression for the steady state capital stock per worker. Indoing so1 assume that the level of productivity is fixed at some value A. {h} Use your answer on the previous part to solve for an expression for steady state consumption per worleer. {c} Use calculus to derive an expression for the a which maximizes steady state consumption per worker. Macroeconomics

  • 1 …

    If NX falls $40 billion, the MPC is 8/11, and there is a multiplier effect (no crowding out and no Question 1. If NX falls $40 billion, the MPC is 8/11, and there is a multiplier effect (no crowding out and no investment accelerator), how much does aggregate change (direction and size)? Macroeconomics

  • Initially real interest rates in the United States England and Japan are all equal at 5 percent Then the

    Question Initially, real interest rates in the United States, England, and Japan are all equal, at 5 percent. Then the central banks alter their policies, so that the American interest rate rises to 6 percent, the Japanese rate falls to 4 percent, and the British rate stays at 5 percent. a) How would you predict that capital flows among the three countries would change? b) Using supply and demand curves, show how the exchange rates are likely to change. c) How do you expect the balance of trade in the three countries to change? d) What quantitative relationship would you expect between the change in the capital flow and the…

  • Consider the following hypothetical data for the US economy in 2020 (all amounts are in trillions of dollars)

    Question Consider the following hypothetical data for the US economy in 2020 (all amounts are in trillions of dollars). Consumption- 11.0 Non-income-related taxes net of subsidies- 0.8 Depreciation- 1.3 Government spending- 3.8 Imports- 2.7 Gross private domestic investment- 4.0 Exports- 2.5 A. Based on the data, what is GDP? NDP? NI? B. Suppose that in 2021, esports fall to $2.3 trillion, imports rise to $2.85 trillion, and gross private domestic investment falls to $3.25 trillion. What will gdp be in 2021, assuming that other values do not change between 2020 and 2021? Macroeconomics

  • You are given the following information

    The labor force consists of 154,704 Question You are given the following information: The labor force consists of 154,704 adults The number of employed adults within the labor force is 139,442 The number of adults not in the labor force is 82,624 What is the unemployment rate in this economy? Macroeconomics

  • If there is a decrease in personal taxes the correct sequence of events is

    a. a decrease in taxes Question If there is a decrease in personal taxes, the correct sequence of events is a. a decrease in taxes increases disposable income which increases consumer spending. The increase in consumer spending shifts AD to the right increasing output and price level. b. a decrease in taxes increases disposable income which shifts AD to the right increasing output and decreasing price level. c. a decrease in taxes shifts AD to the right increasing output and price level. d. a decrease in taxes increases consumer spending which shifts AD to the right increasing output and price level. e. a decrease in taxes increases disposable income which…

  • Assume the economy is at full employment as of January 2018 and the government passes a tax bill that reduces

    Question Assume the economy is at full employment as of January 2018 and the government passes a tax bill that reduces taxes by $100B. The tax bill, however, does not change government spending. (These are are all short answer, but please provide enough detail to explain your answer. That is, it is not sufficient to claim prices go down or output goes up. Explain, briefly, why that happened.) A. What effect is this likely to have on output and prices levels? B. What effect will this have on interest rates and investment? C. What is the likely response by the Federal Reserve? D. Suppose that the economy was below full…

  • You recently bought

    a $10,000 10 year US government bond that guarantees you 2% interest per year Question You recently bought a $10,000 10 year US government bond that guarantees you 2% interest per year for each of the next 10 years, after which you will receive your initial $10,000 back. If interest rates in the US increase as a result of a strong economy, what impact will this have, if any, on the market value of your bond? Macroeconomics