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

Macro & Micro Economics - Essay Example

Comments (0) Cite this document
Summary
macro & micro economics Contents Introduction 3 Current UK housing market 3 Macro and Micro economic factors 5 Current economic situation and effects on housing market 8 Conclusion 9 Reference 10 Introduction The main participants in the real estate market are owner, renter, developer, renovator and facilitator…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Macro & Micro Economics
Read Text Preview

Extract of sample "Macro & Micro Economics"

Download file to see previous pages The characteristics of the market include durability, heterogeneity, high costs of transaction, long time delays, an investment as well as a consumption good, and immobility. The housing market possesses the importance of second hand transactions. According to the largest lender of the country, 5% of the total transaction is for the purchase of new properties while the rest is for purchase of either old or modern property. Two reasons can be accounted to assess the importance of the housing market for the economy of UK. The first reason states that the purchasing of houses is one of the biggest single purchases for the household and the purchased commodity represents the biggest single item of the wealth of the consumer. The changes in the prices of the houses have the potential to affect the entire economy. Current UK housing market The real estate industry is suffering from another wobble as the lenders are raising the rates of mortgage. The potential buyers are feeling the heat of consumer squeeze. Analysts are of the opinion that it is going to be a tough year ahead and the prices of the houses are taking the declining curve. The market outlook reports that the average price of the new properties failed to take the rising curve in the months of April-May, 2012. The market is driven by the release of equity. According to the nationwide house price index for the month of April, the property values have declined by 0.2 percent. It also states that the house prices are going to fall further as the households are uncertain of any possible recovery in the economy. The lenders are putting double squeeze on the home owners. The experts of the industry concluded that this is the greatest threat for the industry and it has come at the time when the economy was showing the signs of recovery. The seasonally adjusted net balance of headline price recorded a slip of 19%. The newly agreed sales value turned to negative again. The price outlook of the three months declined in the month of April and net balance witnessed a drop from -3 to -17 (RICS, 2012, p. 1). Several economists have noted that the housing market has moved out from the impacts of business cycle for the major economies including that of UK (Jones, Colin and Watkins 2009 p.1). Some writers opined that the housing market of the country is correlated with that of the economy while some others opposed it. Some writers concluded that the market is dominated by the investors and that is why demand may be artificially high or low for a long time. The interest rates act as the key economic variable for the housing market and the level of the interest rate will have impact on the demand for housing as it has the potential to determine the cost of credit for the buyers. In order to boost the economy, the interest rates have been set at a lower level. The different stages of supply and demand controls the housing market and so the market for UK is same as the market as in any other part of the World. There are two potential risks that are associated with the housing market. The first is the interest rate and the second one is mortgage indebtedness. The borrowing costs are a significant factor that determines the rates of mortgage and the ability to pay back the loans. The repayments of the mortgages become expensive as the interest rates rise and the previous crashes occurred due to this reason. The offered mortgages vary from nominal fixed rate to variable rate or index ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Macro & Micro Economics Essay Example | Topics and Well Written Essays - 2000 words - 1”, n.d.)
Macro & Micro Economics Essay Example | Topics and Well Written Essays - 2000 words - 1. Retrieved from https://studentshare.org/macro-microeconomics/1451935-macro-micro-economics
(Macro & Micro Economics Essay Example | Topics and Well Written Essays - 2000 Words - 1)
Macro & Micro Economics Essay Example | Topics and Well Written Essays - 2000 Words - 1. https://studentshare.org/macro-microeconomics/1451935-macro-micro-economics.
“Macro & Micro Economics Essay Example | Topics and Well Written Essays - 2000 Words - 1”, n.d. https://studentshare.org/macro-microeconomics/1451935-macro-micro-economics.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Macro & Micro Economics

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

Macro Economic Policies of the French and German Governments

In contrast, the Socialist Partys Ségolène Royal has made large spending promises which would cost, according to estimates by the Economist (2006), €49 billion per year by 2012. That is almost a third more than the expenditure planned by the current government, and there are questions as to whether the faltering French economy will be able to support such levels of expenditure.
In the three months to September 2006, the quarterly GDP growth rate was zero, when the Bank of France had forecast growth of half a percent. Many economists believe that the flat growth in the third quarter of the year was merely a correction from the 1.2% growth in the second quarter, a view that was born out by 0.7% growth in the...
11 Pages (2750 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

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

...Economics in business Introduction: The purpose of this paper is to analyze the business objectives as best applicable to the Southampton Solent University. Herein, it is essential for the author to analyze the competitive landscape that the university finds itself and try and identify the forces which are governing the business decisions of the university. Further, the author aims to complete understand the simplex of competitive market forces and subsequently make recommendations for better future functionality of the university. PESTLE Analysis The author feels that it is applicable to use a PESTLE analysis due to the fact that the Political, Economic, Social, Technological, Legal and Environmental aspects of this model...
6 Pages (1500 words) Assignment

The Key Macro Factors that Have Influenced the UK Grocery Retailing Industry since the Early 1960s

...1. Assess the key macro factors that have influenced the UK grocery retailing industry since the early 1960s. The concept of organisational change is inherently intertwined with external threats and opportunities, which businesses must adapt to as part of strategic planning to continue long term growth. Senior and Fleming argue that the concept of organisational change has many faces, namely “convergent changes and transformational change that is organisation wide and characterised by radical shifts in strategy, mission values and associated changes of structures and systems” (In Thompson & Martin, 2005, p.41). Moreover, Johnson et al highlight that external macro-economic factors intrinsically impact strategy management and without...
13 Pages (3250 words) Assignment

Economics Perspectives and Policy

...Running Head: ECONOMICS PERSPECTIVES AND POLICIES Economics Perspectives and Policy of the of the Economics Perspectives and Policy Macroeconomics and Microeconomics The field of Economics has two branches that are microeconomics and macroeconomics. The learning of the whole economy in the world is called Macroeconomics, including inflation rate, business cycles, business growth and the rate of unemployment. On the other hand, Microeconomics is the study of individuals and how their choices influence the flow of the economy. (Giannetti, 2003, 190) Microeconomics and Macroeconomics are linked with each other. For example, the price of gas in California is about 10% higher than the national average. California is one of the largest states...
6 Pages (1500 words) Coursework

Macro and Microeconomics Factors in the UK Housing Market

The housing industry is divided into residential, commercial and industrial segments. Economists define supply in terms of service units, that is, a physical unit can be deconstructed into the services that it helps provide. These housing unit services are considered as an unobservable theoretical construct. Housing stock depreciates making it qualitatively different from a brand new constructed building.
The owner, user/owner and renter comprise the demand side of the housing market while the renovators and developers comprise the supply side of the market. In order to implement the simple demand and supply analysis to the housing markets, several modifications have to be made to the standard microeconomic procedures and ass...
8 Pages (2000 words) Research Paper
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 Macro & Micro Economics for FREE!

Contact Us