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 - Essay Example

Comments (0)
Summary
Macro & Micro Economics The development of the subject of Economics as a branch of social science has been developed on the assumptions of rationality as one of its fundamentals. And stressing upon this assumption coupled with the evidences of the behavior of the agents (rational human beings engaged in the domain of social interaction), economics has been able to develop various stylized theoretical models for analyzing those interacting patterns and generating optimal solutions for the attainment of general welfare of the people…
Download full paper
GRAB THE BEST PAPER
Macro &Micro Economics
Read TextPreview

Extract of sample
Macro &Micro Economics

Download file to see previous pages... 16). Within the vast arena of macroeconomics, the development of the model of Aggregate Demand and Aggregate Supply generally known as AD-AS model is of immense importance as it has been developed and applied for determining and evaluating the factors that are very useful in realizing the effects of Real Gross Domestic Product which is i.e, GDP deflated by the general price level. As a consequence the model also acts as a useful indicator for the determination of the inflation level of the economy (Taylor & Weerapana, 2009, p.695). The AD-AS model also incorporates the notion of micro economic concepts like demand and supply framework including equilibrium analysis (Karl, E, 2007, p. 409) and thus setting up a platform in accordance with the demand of the paper. Focus of the paper The paper will focus on the underlying mechanism of the aggregate demand (especially) and aggregate supply along with the concepts of volume of money demand and supply and its application and importance in the economy of the United States of America (US) with its recent financial crisis within the backdrop of the article, “It’s the Aggregate Demand, Stupid” written by Bruce Bartlett who has held senior policy roles in the administration of Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Pau. Crux of AD-AS model Before entering into the AD-AS model a short purview of the notion of law of demand and law of supply requires to be mentioned. The law of demand has been developed by the economists out of several criticisms (various exceptions like Giffen goods, Veblen effect) and the law basically states that for a normal commodity, there is an inverse relationship between the price of a particular commodity and the quantity demanded keeping all other things constant. The demand function can be stated as,signifying the inverse relation between price and quantity. A short mathematical and graphical explanation will make it clearer (Maurice & Thomas, p.43). Let, , (where a, b>0) be a linear demand curve which is taken for our purpose. Differentiating the above function with respect to Q we get, Therefore the slope of the curve is negative. The graphical representation is as follows: Fig.1 The law of demand (Maurice & Thomas, p.43) In the above diagram, at the price level P2, the quantity demanded was at the level Q2 when the price fell down to the level of P1, the quantity demanded rose to the level Q1. Thus the inverse relationship between the price and quantity as given by the law of demand is represented. The demand comes from the consumer’s angle in an economy that purchase goods and services in an economy for the maximization of their utility (Bhide, 2010, p. 313). The theory of supply on the other hand represents the positive relationship between the quantity and the price keeping all other things constant (Hussain, 2010, p. 214). It comes from the producer’s angle. More the commodity the producer sells more the price will it charge. Let a linear supply curve be considered as, . Now differentiating the ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
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 (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
Macro & Micro economics Introduction This paper presents an analysis of an article named “China economic growth lower than forecast” published on 15 April 2013 by BBC. This report explains that China’s growth rate has been lesser than the growth rate that the country had experienced in last three months of 2012 (in the first quarter of 2013 Chinese economy grew at the rate of 7.7% while it was 7.9% in October-December quarter of 2012).
6 Pages(1500 words)Essay
Macro & Micro economics
Macro & Micro economics Introduction China is one of the fastest growing economies in the world. Being the second-largest economy, China has shown tremendous growth in the last three decades. According to the estimate of 2012, China’s GDP is US $12.38 trillion (CIA, 2013).
6 Pages(1500 words)Essay
Macro & Micro economics
Macro & Micro economics Introduction The Chinese economy has been growing at a significantly high rate since the last three decades. It is the second-largest economy in the world and is one among the fastest growing economies (Chiang and Standing, 2013). Last year (2012), in the fourth quarter, the Chinese economy grew at the rate of 7.9% (BBC, 2013).
7 Pages(1750 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
Macro & Micro economics
Macro & Micro economics Name of the Student Name of the Professor Course Number Date Macro & Micro economics Doll Production Process There are varieties of dolls that are produced in the modern consumer goods market. Though there are certain machines that help to shape up dolls, the production of dolls is majorly a labor intensive method production that requires more of laborers than capital machinery equipments.
6 Pages(1500 words)Essay
Macro & Micro economics
Macro & Micro economics Contents Contents 2 Introduction 3 Causes and Mechanisms of the collapse of the world trade 3 Current Trade Policies in Response to the Global Recessions 7 Policy responses on negative impact on the trade balance were implemented in the UK 8 Effectiveness of the EU trade policies in the long run 9 Conclusion 11 References 12 Introduction The Great Depression was one of the most severe economic downturn that the world faced during the twentieth century in the pre-World War era.
8 Pages(2000 words)Essay
Micro and Macro Economics
Spillover effect is referred to the decrease in the wages of the non-union company. Generally after any organization increase wages then simultaneous they used to reduce the number of employees to maintain the balance in the profitability.
4 Pages(1000 words)Assignment
Let us find you another Essay on topic Macro &Micro Economics 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