270). Expansionary fiscal policy raises interest rates, whereas contractionary fiscal policy lowers the rates. The way that a person can track the policy that is recommended, is by looking at the output. If it has increased, the price level of such commodity is to rise as well. When there is a larger demand for more expensive commodities, the demand for money increases and the cost to borrow follows.
This is because as price falls consumers can afford more goods as their real incomes increase and they feel richer. Real income is the bundle of goods and services that an individual can purchase. As we move from A1 to A2 utility increases from U1 to U2 because we move to a higher indifference curve so now the individual can now consume a better bundle of goods. This backs up the non satiation assumption of consumption which states more is better thus when we increase consumption total utility increase. The four axioms of consumption: Transitivity, Non-satiation, Marginal rate of substitution in consumption and Completeness must be met in order to be able to draw
With higher GDP the govt will collect more taxes; this is because people will pay more income tax and VAT. This is beneficial because the govt can use this increased revenues to reduce the level of government borrowing and/or spend more on public services and investment in the country infrastructure. Higher economic growth will lead to an increase in demand for labour as firms will be producing more. Therefore unemployment will fall, this has various advantages such as lower govt spending on benefits and less social problems. However economic growth has various costs.
As situations happen around the world the internal economy is being affected, the price of oil increases and more money in the market should be created, but this will affect the inflation, as more money is in the market, the GDP keep growing and the unemployment is decreasing. To balance the economic growth, lower the inflation, and make a reasonable rate of unemployment it is important to take in consideration that typically if money is released into the system the real Gross Domestic Product will increase, creating opportunities of work and decreasing the unemployment rate. After indentifying the tools used for the Federal Reserve and analyzing the influence this has with the money supply the Feds can add or take money into the system to control the levels of inflation, increase the Gross Domestic Product and reduce the
Also, which approach leads to higher number of sales and or larger dollar amount of total sales? The purpose of this research project is to answer these questions and to make a determination and hypothesis. There are many other questions to which my research will be directed. One question that comes to mind is whether lowering the price of the product of service to the lowest price possible at the onset of the sales process is better than coming out with a higher price and negotiating a lower price as the sales pitch progresses. Many of the people I work with including the sales managers for whom I work, constantly tell sales people on the sales floor to “hold your value” in other words telling you to start high with the price and then you have room to come down.
Our money supply affects the country’s economy, interest rates, and borrowing. Erratic increase or decrease in prices of commodities of other items, if continued unabated for a substantial period, can be a source of imbalance in the economy. Why it is important to increase economic growth? It is important to increase economic growth to keep the economy moving forward to prevent job losses, and business closures, which in return you will have, a low money supply. My rationale for the Reserve Requirements would be by lowering the reserve requirements, and the banks will be able to have more money to loan, and then increasing the money supply.
| Time is so important when it comes to financial matters because money received today will have different values in the future. The amount can increase or decrease depending on inflation and interest (Baker and Baker, 2011). | How would you use the time value of money to your financial benefit? | I would invest as much money as I could when interest rates were higher. This would make more money for me.
In the short-run, a larger government deficit would cause an increase to “total planned expenditures and higher aggregate demand “(Miller, 2012, pg. 308). The real GDP equilibrium would rise above the full-employment level because of deficit spending. The price level would also increase. In the long-run, the economy “adjusted to changes in all factors” and the “equilibrium real GDP remains at its full-employment level” even though the increase in the budget deficit causes a rise in the aggregate demand.
From the research that I made I come up with financial incentives to be a major step to be taken for the reduction of patient wait time. If heal care professionals are being paid enough for the service they provide they will be stay and new health care professionals will be enticed by the financial compensation and they will join the health care sector. This will give more health care service providers to the ever increasing demand of health service which in turn reduces patient wait
This method of fiscal policy will stimulate economic activity and directly cause economic growth. (AD/AS diagram, with AD shifting outwards and a caption “the effect of cutting interest rates”) Secondly, the use of monetary policy can be utilized to aid fiscal policy in demand management of the economy A cut in the rate of interest raises peoples disposable income, due to lower mortgage and loan repayments, allowing them to spend more. This will raise consumption, and therefore aggregate demand. The effect of an increase in AD is an increase in real GDP – the total output of an economy – raising living standards through higher choice of goods and services to fulfill needs and wants. However, since the power of