StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Economics - Essay Example

Comments (0) Cite this document
Summary
Economics Name Institution Economics In most cases, the economy is influenced either through the directive of the chairperson of Fed or the president. These controls in the economy are directed through Federal Reserve use of monetary policy tools that include open market operations, the discount rate, and the reserve requirements while on the other hand, the president gives directives through fiscal policy tools that include either increase or decrease of government spending, tax and subsidies…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.7% of users find it useful
Economics
Read TextPreview

Extract of sample "Economics"

Download file to see previous pages As a way of influencing the demand and supply of money in the economy, the Federal Reserve use either contractionary or expansionary money policy. Because, the interest rates are low there is a high availability of money supply in the economy as a result, there is moderate inflation occurrence that is currently at two percent. As the Fed chairperson, the use of restrictive monetary policy measures ensure s there is a steady flow of money in the economy during the period (Bartolotti, 2006). This is because restrictive monetary policy ensures that there is a higher level of depository interest rate for commercial banksas it borrows money from the Federal Reserve banks as they keep their reserves at the authorized level. In addition, it is critical to increase the open market operations by ensuring the citizens with extra money to save can invest in it because of the highly expected returns leading to money being drained out of the economy. As a result, the banking institutions will change a higher rate as it lends less money with increased reserve requirement thus, individuals will seek alternatives for seeking funds rather than borrowing money. In addition, the government can make investments with the funds collected from open market operations leading to increased gross domestic product (GDP) growth. With an unemployment rate that is quite high, there is a need to carry out measures that will influence the growth of employment levels in the economy. Concerning, the new classical economists notion on unemployment and inflation, they highly advocate for a stable inflation-unemployment trade-off that is achievable through the Phillips curve. Based on the Philips curve the trade off is achievable on the assumption of changes in the price level in the private sector freely. This is because the Philips curve enhances the relationship between inflation and unemployment because of fiscal and monetary policy changes (Knoop, 2004). Nonetheless, the classical economics argue based on the conceptualization that the expectations-augmented in the Phillips curve emphasizes that the unemployment rate should not extend further than the natural level as it could lead to increased inflation rates. More significantly, it is critical to implement fiscal and monetary policies to influence employment levels (Knoop, 2004). This is because the economy is recovering from a recession period and the economy tends to grow with the aggregate demand (AD) increasing therefore, the levels of employment will increase. Even though, there is an increased pressure for a raise in wages after rescission, the rate at which the economy grows is faster, and the wages begin to rises slowly. Based on the Philips curve an outward shift of the aggregate demand AD curve because of increased consumer spending causes the equilibrium level of national output to shift to the point Y2 beyond potential gross domestic product (GDP). As a result, this creates a positive output gap, and it is more preferably attributed to cause a rise in inflationary pressure ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Economics Essay Example | Topics and Well Written Essays - 1500 words - 8”, n.d.)
Economics Essay Example | Topics and Well Written Essays - 1500 words - 8. Retrieved from https://studentshare.org/macro-microeconomics/1449114-eco
(Economics Essay Example | Topics and Well Written Essays - 1500 Words - 8)
Economics Essay Example | Topics and Well Written Essays - 1500 Words - 8. https://studentshare.org/macro-microeconomics/1449114-eco.
“Economics Essay Example | Topics and Well Written Essays - 1500 Words - 8”, n.d. https://studentshare.org/macro-microeconomics/1449114-eco.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Economics

Financial Markets and Economics

As of the staff of the Indonesian mine, a thorough evaluation of the existing resources should be conducted regarding all levels of the working area (from the management team to the worker).
b. The acquisition should create a competitive advantage for TCC mainly for the following reasons: 1. This mine should be the first offshore production base for TCC, a fact that could help towards the reduction of the company’s dependence on domestic mines, 2. The transport of the material from the specific mine is easier due to the absence of issues like the rail or port bottleneck, 3. Currently, the mine has a positive performance with a tendency for more growth (an export authorization for 20% more tonnage was granted this year)...
12 Pages(3000 words)Assignment

International Business Economics

According to Adam Smith, the absolute advantage would be realised as long as the cost of production differed from between countries, one or both countries would gain by trading. An example to illustrate this is a situation where we have two countries A and B which produce two similar goods X and Y. The figures show labour cost in hours for producing one unit of a good

David Ricardo formulated the theory of comparative advantage and argued that even if one country is more productive in both lines of production it would be still profitable to trade. Country A is more productive in both lines of production but it will still be profitable to trade with country B, this is shown by first stating that country A is more advanta...
6 Pages(1500 words)Assignment

Business Economics: Small and Medium

The entry of small firms into the global markets has proven to be the main aspect of the creation of economies of scale. Markets are fast evolving to the needs of varied tastes and customer preferences, so necessary knowledge and technology asset has a major role to play for small firms to rise and to match up to the situation. However, small firms are characterized by “smallness of the market share (a large number of similar-sized firms) and hence lack of individual market power, corresponding to the theoretical concept of Pure Competition.” (Waite 1973. P. 154).

They need to overcome the handicap of smallness by strategic alliances and mergers with larger or technically more competent entities. Small firms...
10 Pages(2500 words)Assignment

Issues in Applied Economics

A major issue then, becomes the convincing obligation by the polity not to abuse its force. Because institutions are planned by people with different bargaining powers and not for sake of effectiveness, some models may be less competent than others and due to path dependency, may continue for a long time, resulting in sluggish economy. The shortage of realistic commitment by the state not to suitable property human rights accounts for the incompetent institutions that have developed in different countries. To humor, such situation provides disincentives to investment in socially profitable enterprises, and generates groups with vested interests in preserving the status quo constraints.

Institutions present the fundament...
6 Pages(1500 words)Term Paper

Economics or Ethics

Several CEOs in America have in coalition with top managers deviated from the norms of corporate governance and caused immeasurable woes to the stakeholders. Using their power and ego they chased the wealth for personal gains without any concern for the shareholders or other stakeholders of the company. Enron, the world’s largest energy trader at one time, had to file bankruptcy under Chapter 11 when about 5000 workers lost their job (Bhattacharya, 2004). Arthur Anderson, one of the big five auditing firms was charged to have colluded with the management to misappropriate funds and project a picture different from the reality. Income was inflated and then all concerned papers were destroyed. The leadership at Enron was conce...
6 Pages(1500 words)Assignment

Real Estate Economics

...Real e economics: Introduction: The real e industry is engaged in leasing, renting, selling of real e and buying real e on behalfof others. The real estate industry comprises of the owners of the estates, the users who are the consumers, the developers who build, the renovators who refurbish buildings and the facilitators who enable sale of real estate, the facilitators comprises the financers example banks, the brokers and lawyers. According to July statistics this year the industry employs over 2125 thousand and the hourly wage rate is estimated to $16.37. This paper discusses the real estate industry on the basis of demand, supply, elasticity of demand and supply, wage rates and wage inequality, how monetary and fiscal policies affect...
7 Pages(1750 words)Assignment

Sports Economics: The Impact of Sports on the Economics of a Community

...in baseball, a sixteenfold increase in football, and a seventeenfold increase in basketball since the mid-1970s. (Scully 1995, p. 3) Looking at the list of the highest paid athletes, one will find that the top tier is occupied by players of team sports. This paper will examine the economics behind team sports and its impact on the economics of a community. The question as to what is the effect of a sports team migrating to a city will be addressed. I. Background Related Literature Academic interest in the economics of sports, particularly team sports, has been significant since the mid-1950s. Starting these times, a body of literature consisted of many books and journal articles...
8 Pages(2000 words)Term Paper

Managerial Economics and Business Environment

Once the above said subject matter is clearly sorted out, the next emphasis would be on the concepts like the opportunity costing, incremental principle, marginal principle, discounting principle, the principle of time perspective, and calculation of economic profit as the guidelines to the scope of managerial economics. (Surender. V, 2008).
To start with, we consider a firm for which different processes have to be carried to achieve its objectives of profit maximization (assuming that all the organizations work with the view to maximize profits). If firms from different sectors are identified simultaneously, then the working of the economy as a whole could also be analyzed which in turn is useful in the decision-making proce...
15 Pages(3750 words)Assignment

Economics in Business

...what they are experiencing in their normal existence. Economic Expansion and capitalism has made survival of the fittest the only real truth of man’s existence; the purest implications of economics on our lifestyle. Therefore, the constant struggle to be the very best in all spectra is the main goal of every individual in the world Social Increasing commercialization in all aspects of the society and changing perceptions of lifestyles and standards of living at this point in time in history. Technological The best means of education provided by the UK business institutions vis-à-vis the passion and conviction of the people in the global community to achieve the best academic experience that is available...
6 Pages(1500 words)Assignment

Economics Perspectives and Policy

...American and UK companies. Borios study (2007) confirmed this view and he cataloged firms in Anglo-American economics as "low leverage" and firms in Japan and continental Europe as "high leverage". The capital structure differentials across countries have been wildly and deeply studied. Rajan and Zingales (2006) (RZ) achieve different results with previous studies. They analyze G-7 countries and find that the German and UK companies have the lowest leverage level and other countries have almost the same leverage level. RZ (2006) claim that the differences between their results and previous one may due to four possible reasons, including differences in measures, different adjustments to correct for differences in...
6 Pages(1500 words)Coursework
sponsored ads
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.

Let us find you another Essay on topic Economics for FREE!

Contact Us