We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Macro & Micro Economics Of PRC - Essay Example

Comments (0) Cite this document
Summary
PRC is now the fastest growing major economy in the world. The paper "Macro & Micro Economics Of PRC" discusses the reasons for its success such as a formula of cheap labor, ease government policy, overall infrastructure, high productivity, and an underrated exchange rate…
Download full paper
GRAB THE BEST PAPER
Macro & Micro Economics Of PRC
Read TextPreview

Extract of sample
Macro & Micro Economics Of PRC

Download file to see previous pages... PRC is consciously making effort to lower its inflation rate and/or manage inflation expectations by raising bank reserve ratio of deposits through a directive from PRC’s Central Bank. This brings as to the first question as to how will this affect the balance sheets of both the banks and the PRC’s Central Bank. As regard to the banks, their assets, particular deposits will decrease and the same amount will increase the reserve in the "Liabilities" portion in their Balance Sheet.  Expectedly, the assets of the Central Bank either in receivables or deposits will increase as well as their reserves. Normally, banks hold two bank reserves, one is used for cashing checks or satisfying client's withdrawals while the other is called "legal reserves" or sometimes called “federal reserves” or central bank reserves. This is the specific reserves that the PRC’s Central Bank wanted to be raised by the banks, and for this year alone, the reserve requirement ratio (RRR) has been raised for the 5th time to a record high of 21 percent according to Xinhua.   PRC’s Central Bank recent move which is a “contractionary monetary policy” according to Li-Gang Liu, could help manage excessive liquidity in the market but the economic growth of PRC will slow down, however steady during the next two years. Asian Development Bank said in its 2011 Asian Development Outlook that “there is very little risk of hard landing because growth momentum remains robust for the medium term”.”. As compared to last year the Gross Domestic Product (GDP) growth will slow to 9.3% in 2011, a dip from 10.3% annual growth in 2010 (Global Times), mainly due to stubborn inflation this year. One determinant factor of inflation is the Consumer Price Index (CPI), as the CPI rise so is the inflation. Consumer consumption is one of the major components in arriving at the total GDP, the others are government expenditures, gross investment and the net of exports versus imports. Consumer consumption may not be a factor at this time because wages will not outpace production. Government expenditures were already programmed to pay maturing foreign loans, hence will be constant, while investment will decrease minimally due to the expected increase in interest rates. The one that will affect most in computing the GDP is the net difference between exports and imports. As I analyze it, imports will continue to outpace exports due primarily to higher demands for fuel consumption, which are outsourced externally. The World Bank said "strong domestic demand and relative price changes have reduced the importance of external trade for China" (Reuters.com)
There might be an oversupply of products which will considerably affect prices and therefore have an effect on equilibrium. As regards the aggregate expenses, again this will tend to below as the net effect of imports versus exports is high.
PRC’s Central Bank raising of RRR will certainly have an effect on the money multiplier since it will ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Macro & Micro Economics Of PRC Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved de https://studentshare.org/macro-microeconomics/1390152-economic
(Macro & Micro Economics Of PRC Essay Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/macro-microeconomics/1390152-economic.
“Macro & Micro Economics Of PRC Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/macro-microeconomics/1390152-economic.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Micro & Macro economics
The present situation is APE< GDP = ASF. There would a response from the producers by decreasing unemployment, reduction in prices and output. This will make the ASF line to move rightwards and the GDP and APE line to move leftwards. The economy attains a position which is shown in the figure.
10 Pages(2500 words)Essay
Macro and micro economics
The comparison is carried out between these two factors. In the ratio of Ann’s to peter’s case, Ann has a lower utility function than peter because peter is on medication. The amounts that peter will spend on medication makes him more vulnerable in spending.
6 Pages(1500 words)Essay
Micro and macro economics
The public’s demand for the two company’s products and services generated projected gains. Before the merger, several financial analysts opined that the proposed merger would be very successful (Baumol, 2011). Many quarters predicted the business after the merger will be rosy.
10 Pages(2500 words)Essay
Economic
Basically, PRC is still a communist country ruled by the Communist Party of China. Compared to its closed-door policies until the mid-1970s, the liberalization it initiated has generated more business opportunities for entrepreneurs especially in small-scale enterprises.
4 Pages(1000 words)Essay
Macro & Micro Economics
The effectiveness of the two policies is derived from the way the combination of both policies affects the aggregate demand in the economy (APE). The monetary policies affects the supply function (ASF), thereby shifting the supply curve towards the right or left.
8 Pages(2000 words)Essay
Macro & Micro Economics
The demand side of the market comprises of the owner and the renter while the supply side comprises of the developer as well as the renovator. In order to analyze the demand and the supply factors a number of modifications need to be implemented in the microeconomic assumptions.
8 Pages(2000 words)Essay
Macro &Micro Economics
One of the significant areas of economics especially is macroeconomics which is a branch of economics that deals with the problems of a particular country or economic region comprised of several economic agents acting with their individual economic behaviors and the evaluation of the policies taken by the government of these countries in order to tackle those problems (Adams, 2002, p.
8 Pages(2000 words)Essay
Macro & Micro economics (Economics)
vaccinations against infectious diseases). Briefly suggest how government might intervene to correct this under-provision? 5 (C) The Consumer Price Index (CPI) is the official measure of inflation in the United Kingdom. Why might CPI not be an accurate measure of the costs of living for any given individual consumer?
5 Pages(1250 words)Essay
Macro & Micro economics
Name: Student Number: Short Essay: Macro & Micro Economics 1. Write a paragraph explaining why a “technology-based” water pollution-control standard might not be the most economically efficient (or cost-effective) way to achieve a given level of reduction in water pollution.
3 Pages(750 words)Essay
Chinese stock bouble 2007
There is consensus however that China suffered the worst stock bubble in 2007; and this is the stock market crash that this paper will focus on. INTRODUCTION Following a five year period in which China’s Shanghai Stock Exchange (SSE) Composite Index did not do well, the Index saw a dramatic rise - over 130% - in 2006 and 2007 (Tucker & Dyer).
7 Pages(1750 words)Research Paper
Let us find you another Essay on topic Macro & Micro Economics Of PRC for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us