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Macro Economics - Essay Example

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The short run is a period where the quantity of at least one input is fixed and the quantities of the other inputs can be varied while the long run is a period of time in which the quantities of all inputs can be varied.
In the short-run a decrease in technology will lead to a…
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Macro Economics
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Download file to see previous pages This depicts that a greater percentage of the citizens in that country are striving to be in better places and constantly improving the state of the country through the concept of invisible hand.
In India the economic condition is not that stable. This is because only a smaller portion of the population strives to make ends meet while a greater percentage is always dragging the country backwards economically because they don’t work hard and deliver. This is very challenging since the economy is always torn in an imbalanced proportion.
Studies from economists behind this theory argue that it developed an idea of a subsistence level to model the theory. The economists claimed that if real Gross Domestic Product rose above this subsistence level of income, it would cause the population to increase and bring real gross domestic product back down to the subsistence level.
In India the population is extremely high and this means that the real gross domestic product is always above the subsistence level of income thus bringing the gross domestic product back down to the subsistence level. The opposite happens in the United States of America and that is why the gross domestic product there is far better than that for India.
Strong economic growth rate cannot be positive to high population growth. This is because when the population increases, resources for economic growth will be limited. This will therefore hinder growth in the economy due to the imbalance. This defect or problem can be prevented by factors such as controlling population growth by implementing birth policies. The birth rate should be moderate to make the resources adequate for the country3.
When the country has a poor or weak growth rate it is a big hindrance to the economic growth. This is because there will be inadequate labor force in various organizations in the country. Labor is a fundamental factor of production and should therefore be supplied adequately in an economy. To offset this ...Download file to see next pagesRead More
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