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In the economic boom many invested in real estate and rented houses at a higher price to add consistent income. Such investments were centrally made in the business cities. However, the recession has caused unemployment and therefore demand for the rented houses has declined as people on being jobless moved back to their respective cities. In such cases, cost of retaining empty house increased such as maintenance cost etc. Therefore, the decline in income from rented houses caused by the decline in its demand had a positive shift in the demand of the owner occupation housing.
Government to meet the challenge of crisis and budget deficit has been exploiting higher income people. In such case government can identify rental income as an additional source of income for people and therefore increases tax on the rental income. This measure of government to increase income would have a positive outward shift in the demand of the owner occupation of housing. People will prefer to self occupy houses than renting it out for additional income to benefit from tax escape. The mechanism can also be in contrast. Such as government reducing the subsidies to people that have been hit by the recession but are living in own houses can have negative shift in the demand of the owner occupation housing. People in such case can would then prefer to live in rented houses and therefore demand of the higher subsidies from government.
In contrast to above proposition, in case government takes measure to generate the economic activity in certain areas to deal with affects of global crises. Among such measures can be a scheme of providing business loan at lower interest rate to the people that wishes to start own small business venture in local areas. The scheme also offering concession in the electricity and water bills to such people can have positive shift in the owner occupation in that particular area. Therefore, people to take the
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A change in one variable or sector will eventually affect the others, positively or adversely. Therefore, there is no accurate way to calculate the overall effect of a policy on macroeconomic level. This complex interrelationship is the major difficulty in developing macroeconomic policies and choosing the most appropriate policy among alternatives.
But before we present their differences, we should get to know each school of thought. The term classical refers to a group of economists in the 18th and 19th centuries who worked on developing theories about the way markets and market economies work. Adam Smith, David Ricardo, Thomas Robert Malthus, John Stuart Mill, and Karl Marx were the ones responsible for the development of these classical economic theories.
BigMac index is used to measure the purchasing power parity of various different currencies all over the world. Incidentally, this paper is also going to use Big Mac (a product of McDonald’s) and will consider various microeconomic and macroeconomic factors that determine its demand and supply.
However, that has not been the case due to overall shift in the demand curve. Moreover, due to governmental polices there has also been an effect on the supply side on which we will elaborate as under. (Neate, 2013) Firstly, lets discuss some of the factors that may have been the cause of the shift in the demand curve are: a.
It involves formal propositions, hypothesis testing, measuring of quantifiable variables, etc. In this type of research it is assumed that the objectives are given in reality and can be measured by their properties.
Interpretive research method involves sharing of information and social constructions such as language.
, protects supplier from unexpected cost increases, and it is believable to salespeople and customers (Brickley, Smith & Zimmerman, 2009; Apte & Karmarkar, 2007, p.108; Holden & Burton, 2010). However, the most advantageous part of this pricing strategy on the part of the firm
Thus the current price is $25 per part. The contract provides an option to Rich to buy up to 100,000 parts at this price. It must purchase a minimum volume of 50,000 parts. Bhagat’s workforce is heavily unionized.
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