Monetary policies influence and are influenced by international developments, including exchange rates, and based on these market conditions the U.S. government can make strategic changes to these policies to maintain the country’s economic stability (full employment, stable growth and price stability). For example if Federal Reserve actions raised U.S. interest rates, the foreign exchange value of the dollar generally would rise. An increase in the foreign exchange value of the dollar, in turn, would raise the price in foreign currency of U.S. goods traded on world markets and lower the dollar price of goods imported into the United States (Federal Reserve, 2005). By restraining exports and boosting imports, these developments could lower output and price levels in the U.S. economy and control or lower
The real wage and rental price of capital also increase by 10 percent. Question 4 (15 marks) a) Public saving equals T-G. An increase in government spending, G, reduces public saving. b) Private saving equals Y-T-C. An increase in government spending does not affect private saving. c) National saving equals Y-C-G. An increase in government spending reduces national saving by an amount equal to the increase in government spending. d) The equilibrium interest rate increases to bring desired investment into equilibrium with the reduced quantity of national saving.
Marxist theories state that inequality is not a female issue, but a class one, for they note that middle class women are often better off than working class men. This point seems futile; can inequality not be a problem of the female and the working class male? Class aside, it is an indisputable fact that by and large, women are affected more harshly by poverty than men, in Pearce’s research into poverty in the United States, she found that two thirds of the poor who were over 16 were women. Poverty is rapidly becoming a female problem. Marxists however claim that we should focus on the eradication of capitalism, because then gender disparities will swiftly follow.
International Trade ECO 372 University of Phoenix There are many contributing factors to the stabilization and prosperity of our global market. We, the United States, are living in a time of severe trade deficit, meaning that we are importing many more goods than we are exporting. While it is nice to be able to buy foreign products at a lower price, there is risk in doing so. When we purchase foreign goods over domestic at lower prices it forces our domestic companies to sell their goods at lower prices to remain competitive. These lower prices may lend to making enough profit to sustain the current workforce.
Chapter 13 discusses labor markets and the basic models of labor supply and demand but the labor market for unskilled workers is changing. For businesses, the labor supply curve has dramatically shifted to the right especially with the implementation of NAFTA (North American Free Trade Agreement) and the rise of China. There is a surplus of labor supply so the business is able to go along the demand curve to the cheaper wage available, usually in another country. (See attached graph) This loss of jobs for the unskilled workers and increasingly for higher-educated workers is widening the income gap. This shifting of the labor market has other effects too, outside of the labor market.
The recommended amount of support from welfare she receives is determined by how much she makes and if she is unwed. But because of this fact, she is more likely to have less expenses and more money in her pocket to spend. She will have fewer expenses than a married woman with a job paying $70,000, and only a slightly lower living standard. (Pethokoukis) This has become a controversy for the struggling middle class. Not all of those eligible for federal or state support exploit this system, but many do.
However, there are advantages and disadvantages of international trade in the simulation that cause the world’s economy to fluctuate and leave certain countries astray. One of the advantages to international trade that I found for countries was the monetary gains and having the ability to keep their own markets honest causing the local producers to improve its goods for the reason citizens have more choices available to them. The disadvantages of international trade have to deal with countries of higher power that try to take advantage of smaller countries by swindling their government into unorthodox trading during a crisis within those countries. Another disadvantage is the possibility of local producers becoming weak, causing the unemployment rate to rise because local producers are unable to compete with international
Contrast the pros and cons of protectionist policies. A: Governments utilize protectionist economic policies to restrict imports and exports. Protectionism helps to protect nations from an increase in the amount of imports, which could affect domestic production. One of the most common protectionist policies includes raising the price of imports via tariffs, keeping industry in the nation more competitive in the domestic market. Protectionism can also include import quotas, or the restrictions on the quantity of imports allowed to enter a country.
List problems that stem from globalization related to economic development, labor issues, and the environment. Explain the origins and effects of labor migration, outsourcing, and offshoring. Describe possible approaches to dealing with the problems presented by globalization. Key Ideas Critics of globalization believe that it is harmful because it is driven by narrow economic interests. The benefits of globalization are unevenly distributed, and it causes hardship for poorer countries.
By devaluating, countries were able to reduce the exchange value of their currency by decreasing either their gold currency or their value relative to another currency. Even though this did not increase output directly, it did allow for the expansion of these countries money suppliers without any concern for gold movements and exchange rates. Many countries saw greater recovery and took advantage in this freedom. The United States for example increased their money supply by near forty-two percent by 1937. This monetary expansion increased globally which stemmed greatly from the gold inflow.