In this essay, the topic of how would the changes in the interest rates lead to income inequality is discussed. First of all interest rates are one of the main indicator and controlling influences on the economy. Interest rates can be defined as the rate that is charged or paid for the use of money. This cost of borrowing is expressed as a percentage of the total amount borrowed. Income inequality relates to the extent of disparity between the high and low income earners.
Producer surplus is closely related to the supply curve and is measured using the graphical representations. b. What is the relationship between the cost to sellers and the supply curve? The relationship between the cost to sellers and the supply curve is the area below the price and above the supply curve measures the producer surplus in a market. c. Other things equal, what happens to producer surplus when the price of a good rises?
Identifying Principles or Concepts After completing the “Applying Supply and Demand Concepts” simulation the following concepts and principles were identified: demand and supply along with equilibrium as microeconomic principles, and shifts in demand and supply along with price ceiling as macroeconomic concepts. The previous concepts were identified accordingly because microeconomics analyzes from the parts to a whole; therefore, supply and demand and equilibrium as the small parts that affect the whole. In contrast macroeconomics analyzing from the whole to the parts reflects how the concepts of price ceiling and shifts in demand and supply are larger outside factors that affect the smaller internal parts. Supply and Demand Curve Shifts In the simulation there were multiple examples reflecting shifts in the demand curve as well as shifts in the supply curve. For any supplier, a higher price is an incentive to supply more; therefore, as rental rates increased, the number of apartments GoodLife was willing to lease also increased.
Distinguish between a Change in Supply and a Change in Quantity Supplied. List and explain the factors that will shift a supply curve. Use demand and supply curves to determine the equilibrium price and quantity of a good. Use demand and supply curves to show the effect changes in supply and/or demand have on the price and quantity of a good. • Define Price
B) microeconomics. C) managerial economics. D) market economics. 2) Microeconomics is best described as the study of A) the choices made by individual households, firms, and governments. B) inflation, unemployment, gross national product, and the nation's economy as a whole.
The higher the price of a good the more supply of the good will be placed into the market. Conversely, as the price falls, the less of a supply of the good will be placed into market. Determinants of Supply Supply is determined by the cost of the resources needed to produce the good, technologies used in production, any taxes or subsidies that the producer receives, the cost of goods that are comparable or not, the outlook of the producers, and how many sellers are in the market. As these determinants change there will be a corresponding change within the supply side of the
For income property, sales comparison technique is used with application of a gross rent multiplier. This multiplier determines the market value by finds comparable rental property, and then takes those
Marissa Allison Research Project: Price Control on Minimum Wage Bryant & Stratton College ECON220 Prof. Gibson 19 April 2013 One price control is a government regulation of prices by establishing maximum price levels for goods or services, most commonly during a period of inflation. The consequence of the effective maximum price control is for a shortage to emerge as quantity demanded exceeds quantity supplied. Minimum wage is a common economic policy topic that affects the income of working citizens. Nations use minimum wage policies in order for individuals to maintain a minimum quality of life. Minimum wage laws can have several positive or negative affects in the economy.
(a) A tilt of spending towards nontraded products causes the real exchange rate to appreciate as the price of nontraded goods relative to traded goods rises (the real exchange rate can be expressed as the price of tradables to the price of nontradables). (b) A shift in foreign demand towards domestic exports causes an excess demand for the domestic country’s goods which causes the relative price of these goods to rise; that is, it
Explain the meaning of money multiplier and its role? (6) The money multiplier calculates the maximum amount of money that an initial deposit can be expanded to with a given reserve ratio. Money multiplier can also be expressed as a ratio of a change in money supply divided by a change in money base. The role of the multiplier is that it explains why output fluctuates.the money multiplier is a multiple of reserves; this multiple is the reciprocal of the reserve ratio, and it is an economic multiplier.In monetary economics, a money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system. Most often, it measures the maximum amount of commercial bank money that can be created by a given unit of central bank money.