... Macroeconomics: Money and Finance Lecturer: Describe some of the structural reasons of European labour markets that keep European unemployment rates high. Please explain the possible reasons briefly. Structural unemployment involves an economic condition where people who are willing to work can not find a job due changes in economic demand (Tucker, 2011). Those changes may be attributed to technological, demographic and industrialization changes respectively (Tucker, 2011). This may further force on organisation to incur huge capital expenditure as it tries to retrain its employees (Tucker, 2011). In above connection, structural unemployment is long rather than short term economic condition....
... Macroeconomics of Argentina Introduction The collapse of Argentina’s economy in December 2001 appears to be one of the most emblematic evidences that indicated the failure of neoliberalism among developing countries to provide equitable and sustainable economic growth. Traditionally, Argentina was one of the countries in Latin America that had better social indicators. Compared to the other nations in this region, Argentina’s inequality and poverty levels were very low. The country had widespread labor protection policies and the unemployment rate was low1. Scholarly research and other academic studies show that the socioeconomic status of Argentina has been deteriorating since 1970s with the sharp...
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... Chapter 8 Globalization is one of the most significant trends in the modern world. The world has become a single and unified entity, where cultural and national differences are not so crucial anymore. There are a lot of reasons for globalization. Probably the most important are the following: technological development, development of transport infrastructure, growth of the role of international companies, etc. In any case, these reasons have led to creation of a global world. Global economy is one of the most essential areas of this world. “Although technology, tastes, and public policy each have important independent influences on the pattern and pace of economic integration in its various...
... This section discusses the consumption function of a closed economy, a closed economy is the consideration of an economies income or output in the absence of imports and exports, and Keynes stated the open economy income or output function as follows:
Y = C + I + G + (X -M)
Where Y is income, C is consumption, G is the government expenditure, m is imports and X is exports, for the closed economy the model is stated as:
Y = C + I + G
For this case we consider the closed economy function to discuss the consumption function in the economy.
According to Keynes consumption is a function of income, this function depicts that as the level of income increases then the level of consumption also increases, in...
... Macroeconomics Math Problem Question The U.S government uses the G t as a way of solving the threats that might lead its economy towards recession.
a) The new AD curve with the use of the established government spending equation and its subsequent slope.
The aggregate demand (AD) will lead to an increase in the country’s output after the change in the U.S government spending drives an increase in the creation of jobs and innovations. Holding to the changes made by the government, the AS curve will shift upwards from the left to the right margin. Therefore, there will be a shift in the AD from AD1 to AD2 in slanting straight lines.
b) Under the inflation shock, AD = C + I + G + X M and the subsequ...
... Discussion Question Economics is indeed a broad field which has its recognition in almost every aspect of life. There are basically two different types of economics which predominantly are microeconomics and macroeconomics in total (WIERENGA). Microeconomics is the field of economics that denotes with the economics of the individuals whiles the economics of the country as a whole found as macroeconomics in total. There are numerous concepts, that specifically comes under the ambit of economics and the name of cost efficiency is one of them, in fact quite important as well. There are number of concepts that define about cost efficiency in total and putting the first thing on the first step is one of...
... Table of Contents Answers to Questions and 3 3 Answers to questions 2 5 Answer to Question No. 4 7 Answer to Question No. 5 7 Answerto Question No. 6 8
Answer to Question No. 7 8
Answer to Question No. 8 9
Answer to question numbered 9 9
Answer to question numbered 10 10
Answers to Questions 1 and 3
In the goods market, equilibrium can be defined as the situation where peoples’ planned (ex-ante) expenditure exactly matches the realized (ex-post) expenditure, since under such a condition when peoples’ expectations have materialized, they don’t have any incentive to alter their behaviour. The actual or realized expenditure is the amount households, firms and government spend on goods and services, i.e....
... 21 July 2008 Macroeconomics: Dispersion of inflation rates In macroeconomics, inflation is one of the main and most complicated issues. The widespread issue of the inflation and of its acceleration, and especially the reduction in its dispersion, has led to a rather general acceptance of the view that it is being transmitted among countries to a greater extent than before, to expositions of various possible mechanisms of transmission, and to econometric testing of the relative importance of these mechanisms. The aim of the paper is to discuss the process of international transmission itself and examines the interrelations between dispersion of national inflation rates and transmission.
According to ...
... of learning Macroeconomics in my life Benefits of learning Macroeconomics in my life Over the recent past, the global economy has been faced with a lot of uncertainties associated with fluctuations of prices. The stability of an economy is as well determined by many factors including preceding and current economic conditions. Therefore, the study of economics is considered a significant aspect as it helps individuals to have a clear understanding and comprehend market conditions in regard to policies. This paper describes how learning economics has helped me understand economic policies effectively and how this knowledge will be helpful in my life.
Based on the fact that I am pursuing a course in eco...
... Macroeconomics The article selected for the project is “Do Tax Cuts Leads to Economic Growth” (Leonhardt, . The article is focused on the US economy and described about the impacts of tax cuts on the economic growth. The article is written in technical language of economics and it seems that the author has conducted an in depth analysis on the US Economy. Following is the evaluation of the article. 1. Principles of Economics & US Tax Cuts The article has beautifully covered the different economic indicators along with their projected movements on the basis of the proposed strategy by the current Govt. The author has identified, as well as, analyzed the impact of tax cuts by taking into consideration ...
... Macroeconomics Show how the IS Curve and the LM Curve can be shifted to get an increase in output without a change in interest rates. Whatmix of monetary and fiscal policy is needed to accomplish this
To achieve increase in output without accompanying change in interest rates both IS and LM Curves have to be shifted to the right with the equilibrium point moved only horizontally and corresponding to the same level of interest rates.
It can be achieved through implementation ob both monetary expansion policy and fiscal expansion policy measures. As monetary expansion policy operates by stimulating interest-responsive components of aggregate demand, primarily investment spending, it ultimately resul...
... Macroeconomic Events and Ideas This study examined how the Great Depression of 1930s exposed the weaknesses of classical macroeconomics and led to the emergence of other schools of macroeconomic thoughts. The researcher mainly relied on secondary information from books and other articles in the internet to gather information about the topic. The study established that classical macroeconomics could not explain could not forecast, explain or give solutions to the problems caused by the Great Depression. This failure marked the emergence of Keynesian Revolution, which offered to provide solution to the problems of the Great Depression. The paper concludes by asserting that macroeconomics is a field...
... The report has been prepared in order to build a thorough understanding of the three important and interrelated macroeconomic concepts, i.e. inflation, disinflation, and deflation. The report will determine the causes of each of the concepts in an economic environment and several repercussions they can make into the global financial system. The academic definitions of inflation, disinflation, and deflation will strengthen the reader’s understanding before providing the complex details of each of the concepts and applications. The final section has presented conclusions and recommendations to the economists in terms of how the inflation, disinflation, as well as deflation can be controlled.
... College of Business and Economics Principles of Macroeconomics (ECON 112) 1st Assignment (Wednesday 4th of November Total Marks 4
Student Name: ID:
1) Fill in the missing values in the following hypothetical table. The working-age population, employment, unemployment, and labor force are measured in thousands. Show your work.
Labor Force Participation Rate
Working age population = labor force/labor participation rate = 135113 x 100/67 = 201661.19
Consequently the working age population is approximately 201661
... Theory and Applications Assignment # *** *** EXECUTIVE SUMMARY This paper discusses whether the oils price shocks are responsible for both recessions and increases in the rate of inflation and whether we can expect inflation and recessions in world's major economies if the price of oil remains at or above the level reached during the past 12-18 months. It is a fact that the oil prices have been spiraling in the last two years and at present it has reached 72 US$ per barrel from 40US$ and it has been major cause for concern in all countries, including so called developed countries. It is also a fact that many countries have been witnessing inflationary trends in their economy and are facing...
... The area that has been chosen for the purpose of this report is the exchange rates sphere of the macroeconomic arena. This has been done sobecause it is most easily one of the more tangible issues of macroeconomics i.e. issues that directly affect people and do so in a really short period of time and a basic understanding of this area is deemed necessary to understand macroeconomics in a better way. There are basically three types of exchange rates:
a) Free Floating Exchange Rates: In this type of an exchange rate system the currency determines its value on the basis for the demand and supply of the currency on the international foreign exchange market. The exchange rates have a close impact on the e...
... Introduction to Macroeconomics A) Why is it considered necessary to control the rate of inflation? It is necessary to control the rate of inflationfor its several harmful effects as described in the following paragraphs (Parkin, 2010). Impact on Purchasing Power With the inflation rate gyrating upwards, real wages of the person fall leading to reduced purchasing power. Everyone is not protected in the market with cost-of-living increase, especially workers in an unorganized sector. Many workers earn their subsistence on fixed incomes because of either no or very less bargaining power; they cannot ask for a proportional increase in their wages that can match the inflation and thus, they are harmed...
... Events in Macroeconomics Written By: There would be many resources for macroeconomic news in the world. The Wall Street Journal has always been revered as one of those which would be quite the authority on economic news. Macroeconomics encompasses many pieces of economic life and would be discussed in great detail over many different subjects. Included in the five specific articles would be discussions on immigration, housing, the federal interest rates, and the US dollar.
Gordon Hanson and Philip Martin trade off in their discussion titled Immigration's Costs - And Benefits from the June 26, 2006 Econoblog in the Wall Street Journal and give a great deal of understanding in the heated debate on ill...
... between price level & increase in total spending with different stages of unemployment in an economy: Price level is an important factordetermining the total spending of an individual. When there is a rise in price of a particular good you want to buy, it affects your spending level.
In the short-term view, inflation and unemployment are inversely proportional to each other. That means when unemployment is high, price level keeps low and when inflation goes high, unemployment takes a down turn. The problem with this phenomenon is that the government and the regulators of an economy would ideally want to keep both the unemployment level and inflation at as low as level possible. This relationship bet...
... - 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...
... 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 GDP
U.S. Population (in Millions)
Real GDP per Capita
Real GDP per Capita is the Total G...
... Head: Introduction to Macroeconomics Introduction to Macroeconomics This paper examines the relevance of GrossDomestic Product as a metric for measuring the economic well being of the present days economies. The paper explains the different types of GDP's and their differences. Later it discusses the shortcomings of GDP as a economic and social indicator and the alternatives available to it.
Gross domestic product can be defined as a measure of the market value of all final goods and services produced by a country in a given time frame. It has always been considered an important indicator of economic activity. The GDP is estimated by three distinct theoretical approache...
... in Finance Question one A) A Closed -economy is the one that limits trade with the outside world thus relying wholly on its own resource. In a model under a closed -economy macroeconomic, some of the assets are taxed and there is an evaluation of the long run and short run implication of a change in the expected inflation. Any increase in the inflation rate will shift the aggregate demand composition since the assets bearers will shift their case from the assets that are taxed to the untaxed one. We shall construct an IS-LM model in a closed economy (Obstfeld and Kenneth, 1996)
The model is taken to be equally influential as the Keynesian model that which was originally formulated by John Keynes in t...
... Executive compensation is a microeconomic consideration at most times but due to recent sweeping ments by the Federal government, executive compensation is now a macroeconomics topic. The changing economics of executive compensation is seen as a reform to fix the market imperfections (Paulin 1). However, this has resulted to some issues that are becoming wider in scope. The impacts are now felt even in the free market and recruitment of labor. Free market is supposed to function efficiently on itself without any intervention from other economic agents. As for the advocates of free market economy, business cycles are normal (McConnell and Brue 134). But during the past years, its ability to correct...
... & Macroeconomics and their impact on daily life Part To, Assembled Professionals, This letter purports to elucidate certain relevant facts about Micro and Macroeconomics.
Differences between Micro and Macroeconomics
Modern economics has two main branches – Microeconomics and Macroeconomics. Both the branches study economic issues and provide logical solutions to economic problems at different levels. While Microeconomics studies economic problems at an individual level, where the individual could be a person, a household or a firm; Macroeconomics studies them at the aggregate/national level as a whole.
Microeconomics: The term ‘micro’ has been derived from the Greek word ‘mikros’ which literally m...
... - Paradox of Thrift Economics as we know is the art of managing the financial elements in such a manner that forces of demand and supply make a delicate balance. Economics is further subdivided in macro and micro-economics. Thrift is an integral part of this arrangement which calls for sensible and cautious management of money and goods so that wastage is minimized while maximizing the value. With the help of the paradox of thrift, Keynesian economics has been able to illustrate the differences between macroeconomics and microeconomics. It shows how microeconomic considerations only will seriously jeopardize the macroeconomic factors and the economy as a whole. If everybody in the population starts...
... 20th March Macroeconomics: Minimum Wage Introduction Minimum wage refers to the lowest remuneration that an employee gets legally in hourly, monthly or daily bases. It may also be defined as the lowest wage that that employees may use to sell their labor. In order to have a motivated workforce in the private as well as in public sector, governments intervene and set up minimum wage that employers should adopt. It is worth to note that even though minimum wage regulations are followed in many jurisdictions, there exists difference of opinions that touches on the benefits in addition to the draw backs of the minimum wage (Sowell 21). According to the supporters of the policy, minimum wage improves...
... assignment a) ‘Quantitative easing’ is the term for a monetary policy used by central banks so that the national economy grows. However, this policy is only used when traditional policies have failed to hit the mark. The major process is to inject the economy with a particular amount of money and for this purpose the central bank will purchase financial assets. This is facilitated by the private sector and banks by means of electronic money. The liquidity and funding in the money market increases by a growth in the money supply due to a rise in capital in banks and other financial institutions (Wieland, 2009). Quantitative easing is divided into expansionary and contractionary policies as well....
... work College: a) Find the Marginal Rate of Substitution. (4 marks) Arc: Slope of chord MRS Y X) = - ?Y / ?X Point: slope of tangent MRS = - dY/dX along indifference curve f U(X,Y) represents preferences, U(C,l) =1/c^3 +1/l^3 du/dc =1/3c^-2/3 Marginal rate of substitution is as below (b) Find the Marginal Rate of Transformation. (4 marks) Marginal rate of transformatio is as below UNs(C , h – Ns) – wUc(C , h – Ns) = 0 (1) zFNd(K , Nd) = w (2) We have UNs(C , l) – zFNd(K , h – l)Uc(C , l) = 0 Since p = zF(K , h – l) – wNd and G = T, from the budget constraint C = zF(K , h – l) – G (c) Setting MRS=MRT, solve the resulting equation algebraically for l as a function of G. (6 marks) c)First-order...
... History (Macroeconomics) of South Africa South Africa’s economy barely relies on mining and production. It has been thelargest world producer of gold with its main mining hub at Witwatersrand. It is capable of producing almost 40% of the world traded gold. The country has mostly white citizens who have amassed up most of it wealth. It stands to be the richest country in Africa with potential of producing 25% of the continent goods and services. This country also deals with export of other valuable raw materials like copper, diamonds and coal. The country has well established a plant which deals with production of chemicals, steel and machines. Though the country is not well endowed with good farming ...
... of Interest Rates on the Savings Ratio Introduction The savings ratio signifies the percentage of the income that is saved without spending. With a fall in the saving ratio it may be inferred that there is an increase in the consumer spending which is usually financed by additional borrowing. In any economy the marginal propensity to spend and save will differ from individual to individual. In general people with lower income tend to have a higher propensity to spend and any changes in the government policies with respect to direct taxation and level of welfare benefits will have a serious impact on the propensity to spend. Normally the following are the key factors that determine the level of...
... Paradox of Thrift In John Maynard Keynes's 1936 groundbreaking book d The General Theory of Employment, Interest, and Money Keynes parted ways with the classical view of economics and investment by putting forward the Paradox of Thrift (cited in Chamley 1984, p.1,2). Until that point in time it was the widely held belief that savings resulted in increased investment in the capital structure and would stimulate the economy. Keynes broke ranks with the paradox and challenged the traditional view by postulating that savings would remove demand from the system, result in less production, and stimulate unemployment. He contended that "...lack of spending was likely to be a chronic problem in an...
... Macroeconomics SECTION ONE: a) Wanda, in America, wants to buy a bottle of French wine. The wine costs 1000 euro’s. Pierre, a Frenchman, wants to buy an American computer that costs $2000. The exchange rate is ‘1 euro=$1.08’. Showing all work, how many dollars does Wanda spend to buy the wine, and how many Euro’s does Pierre spend to buy the computer? Given that ‘1 euro=$1.08,’ therefore Wanda will spend (1000*1.08) 1080 dollars when purchasing a bottle of French wine. In the case of Pierre, ‘$1.08=1 euro’ and will have to pay (2000/1.08) 1,851.85 Euros for the purchase of computer. b) Assume the exchange rate changes. Now, ‘1 euro=$1.20’. Showing all work, what does Wanda pay for the wine? What...
... Impacts and causes of Hyper-inflation in Virginia Beach Area Introduction Inflation refers to a persistent increase in prices of commodities whereby, the purchasing power of money tends to fall (Mankiw, p657). Additionally, inflation may be understood by taking into consideration both monetary and price inflation. Monetary inflation refers to an increase in amount of money in circulation as government prints more money. This further causes commodities prices to rise due to loss in purchasing power of money. On the other hand, price inflation refers to a persistent rise in prices of goods and services whereby, a lot of money can buy only a few goods (Mankiw, pp381-385). Economist and financial...
... Macroeconomics and the Newspaper Industry Why do you think the newspaper industry has been hit so hard? The newspaper industry has been hit so hard because ever since news and other relevant information could be accessed electronically, people’s reliance on print medium, particularly on the newspaper, for news and current events had significantly declined.
What sources do you use to get news? Why? People get news from diverse sources including online sites and from the television; which are deemed more updated than the news printed in newspapers. News from printed medium are usually events that happened a day before and the printing time causes delay in updates. In contrast, those news events deliver...
... to the Following Questions Explain the meaning of the Keynes and Pigou effects. Can deflation be regarded as providing a realistic escaperoute from recession 1
2. Derive the classical aggregate supply curve and set out what would happen to money wages, real wages, employment, prices and output if there was a rise in the money supply. Explain the importance of the assumption that labour demand is elastic to the classical notion that a cut in money wages would stimulate output and employment. 3
3. With reference to the closed economy IS-LM model, illustrate what you understand by the term 'crowding out'. Outline the factors that govern the extent of crowding out that follows a fiscal expansion. 5
... and Section # of Q1) Since 1976 we see a fluctuating trend of Economic Growth in the UK’s economy. It can be analyzed by figure 1 from the case that there have been three stages where economic growth has fallen considerably which can be classified into periods of recession.
These periods include the early 1980’s recession where the level of GDP fell from peak to trough by 5.9 %, then in early 1990’s where the level of GDP fell from 1990 to 1991 to around 4.5 % which was just a moderate fall however the most severe fall in GDP occurred between 2008 and 2009 that was of 6.3 % which was associated with the global financial crises.
The level of GDP increased from trough to peak by around 10.2 percent be...
... Money and Banking
Macroeconomics is the part of economics that deals with the economy as a whole, as opposed to microeconomics that deal with individual industries and sectors. Fluctuations in the economy as a whole, that is, in aggregate output, cause fluctuations in the unemployment rate, interest rates, and average prices. Monetary theory studies the demand and supply for money and the natural tendency of the macroeconomic system to balance the supply and demand to reach monetary equilibrium (Thurman, 2006).
The figure below shows the diagrammatic representation of monetary equilibrium. The aggregate demand curve (AD) describes the total volume of aggregate expenditures in the econom...
... 4 November 2009 Macroeconomics This ment is true. In an economy if 30% of the output is produced by the capital, the optimal savings level rate will inevitably be 30%, in an economy where the output is 10, 3 units must be saved and the other 10 units must be consumed. Hence the statement is true.
2. Growth in population will result in the increase in workforce and it reduces the capital stock per worker. This is more like depreciation and hence this statement is false.
3. Solow Model:
n represents growth in the labour force and as the growth takes place k=K/L here a clear case of decline is seen as L increases. This also implies that y=Y/L as L again increases. "Thus, as Lg...
... and the Tablet PC Industry Macroeconomics and the Tablet PC Industry The introduction of the first modern tablet, the Apple’s iPad, the United States’ PC market reemerged into the computer market. The reintroduction of these tablets has created new competition platform against major laptop and desktop PC manufacturers especially those who did set to obtain an early advantage in the market. Form the initial stages, Apple was the dominant iOS manufacturer and supplier within the United States tablet PCs markets (Taylor and National Bureau of Economic Research, 1984). However, Android tablet PCs are emerging and are expected to surpass Apple in the coming year. Therefore, this essay aims at providing...
... head: Macroeconomics Macroeconomics: Theory & Policy (The debate between Keynesian and ical economists on the efficiency of the market mechanism and the efficacy of government policy intervention on the basis of current financial crisis)
The current financial and economics crisis all over the world has again started debate among the economists about which economic theory is more useful in explaining market mechanisms. Some economists advocate the Keynesian economic theory whereas the others argue that Classical economic theory is more useful in studying the market mechanisms effectively. In any case, it is a fact that none of the economists were able to predict the current economic crisis ...
... of the Keynesian Theory of Macroeconomics in the UK I. Introduction The fundamental point at issue between the Keynesian and ical macroeconomic theory lies on the participation of the government on the market activity. Classical economists argue that the market will always eventually reach equilibrium even without government intervention while Keynesian economists believe that only through government intervention can the market ensure employment at full level. Market booms and busts are evidences to how markets work. According to Charles Kindleberger, a self-proclaimed ‘literary economist,’ concludes that “markets generally work well but will need a little help on an occasional basis” (The Economist ...
... Introduction The economy of Botswana is one of the success stories of Africa, having changed from underdeveloped nation during the independence time to the middle-income nation at a period of 3 decades. Effective policies of macroeconomics, better administration, effective operating strategies and efficient diamond resources control are the key factors of successful productivity of economy of Botswana. The gross income of about seventy US dollars in 1966 raises to six thousand and five hundred US dollars triggered by diamonds discovery. This paper will discuss the microeconomics of Botswana with specific emphasis on market labor, economic growth, taxes, debts and key factors that impact the economic ...
... perspectives on Macroeconomics Background information The fiscal crisis in Greece is attributed to a situation of economic fiscal profligacythat is attributed to begin as early as 1980s when an upward trend in public debt began. The situation of fiscal profligacy was facilitated by the presence of deep-rooted corruption and inefficient political system (Georgios, 2010). For Greece, the economic situation remained concealed until the mid-2008 when there was a dramatic increase in public debt as observed in numerous advanced economies. Currently, the financial tragedy in Greek brings out three primary players. First, the Greece government is responsible for allowing a weak political system that...
... of the health care policy in United s The economic growth of a country, recession, the unemployment rate prevailing in the economy and the rate of inflation in the economy are the main concerns of Macroeconomics. The essential and the central idea of this field of economics is that the resource availability of an economy is scarce and people need to made optimum use of those resources so that every sector of the economy are benefited so as to benefit the total economy of the country. The economic variable that is of most important value for the study of Macro economics is the Gross Domestic product (GDP) of a country. The total value of goods and services produced within an economy at a particular...
... Table of Contents Economics 3 Market Mechanism 5 Comparative and Absolute Advantage 8 Elasti 10 Surplus 12 Measures of Productivity 13
Classical vs. Keynesian Economics 19
Role of Federal Government 21
Functions of Fed 24
Effects of changes in Money Supply 26
Creation of Money 28
Economic effects 30
Foreign Exchange Rates 32
1. Define the term economics and describe how it relates to a scarcity, give examples of economic goods and non economic goods.
Economics is the study of production, distribution and consumption of goods and services in an economy. Economics is the science that studies various interactions among economic factors and the impa...
... by: XXXXXXX Number: XXXXXXX XXXXXX XXXXXXX XXXXXX of XXXXXXX Submission: XX – XX – 2009
Outline: The Business Cycle and Macroeconomics Objectives
A. Considering a short term, the four main objectives i.e. of faster output growth, lower unemployment, lower levels of inflation and the avoidance of balance of payments, are all interrelated.
B. Relationship between demand and the phase of the business cycle are different at different times.
II. The Circular Flow of Income:
A. “The circular flow of income is a simple model of the economy showing flows of goods and services and factors of production between firms and households. In the absence of government and international trad...
... Macro4M College: Question one Real gross domestic production (GDP) is more meaningful to economic policy makers than nominal GDP. They consider GDP as a measure of the monetary value of all final goods and services a nation produces in a specific financial year (Pirayoff, 2004, p.37). However, this value is in many cases distorted by inflation and deflation and it becomes important to adjust the effect of this distortion. For nominal GDP calculation, prices that prevailed when the output was produced are used. Hence, the use of prevailing dollar value means that nominal GDP is not adjusted for changing price levels. The measure does not reflect the initial purpose as observed by economic policy...
... the world there are great differences in per capita health care spending, though spending alone does not always result in improved health and life expectancy.
In the poorest of economies, particularly those in sub-Saharan Africa, it is estimated that
providing a basic level of health care to “the 2.7 billion neediest people would cost $57
billion per year by 2007” (Ivinson 551). It is estimated that the global community
currently provides roughly $2 billion per year to health in the poorest countries. For
the poorest economies, spending does appear to make a difference.
Gro Harlem Bruntland, Director General of the World Health Organization, believes
that “health has a central r...
... Exchange: Should Exchange Rates be Fixed or Floating? Introduction In today’s competitive business environment, foreign exchange or currency exchange is of great importance. Currency exchange is formally referred to a system of exchange rate between currencies that assists countries with different currencies to involve in international trade. Currency exchange rate is defined as “the amount of one currency it takes to buy one unit of another currency” (Randel, 2011, p.CXV). The currency exchange rate systems can be broadly classified into two such as fixed or pegged exchange rate system and flexible or floating exchange rate system. Under fixed exchange rate regime, governments keep the value of...