Lower the income tax, which gives citizens more money to spend, and buy more services from civilian-owned businesses, which creates more jobs. -- In the diagram above, what will happen if the government sets the price for potatoes at point A? There will be a surplus of potatoes. -- The government sets the price of wheat for the coming year above the equilibrium price. What effect would this have on supply and demand?
As the demand for one product decreases it can cause a chain reaction lowering the demand for products needed to produce the first product. This cycle will continue until the demand for manufactures goods increased and its citizen’s put more capital back into the economy. This theory is true for any reason that people stop buying goods, if the demand goes down so does the supply and the money spent on the supply. In effort to stabilize an economy that is stuck in the decreasing demand and supply cycle the government should increase spending and find ways to increase individual spending across the country. As the capital is put back into the economy the demand for supplies will go up.
Consumer price and producer price in 2009 to 2012 continue to drop and raise the price for consumers was not steady. The direction and magnitude of price change in the Producer Price Index for finished goods anticipates a similar change in the Consumer Price Index for all items. When this assumed relationship is contradicted by the actual movements of the two series. The answer is that conceptual and definitional differences between the PPI and CPI—differences which are consistent with the uses of the two measures—contribute to the differences in their price movements. A primary use of the PPI is to deflate revenue streams in order to measure real growth in output.
The diagram above shows that real GDP has increased from Y1 to Y2 which means that economic growth has increased. As a result, unemployment falls as we are getting closer to the inelastic part of the AS curve, which is much needed as “unemployment has shot up” in this economic crisis. However, inflation has risen from P1 to P2 which means that our exports become less competitive so our trade deficit gets worse. However, the rise in inflation is needed as inflation is falling below the 2% target. The changes in the government’s macroeconomic objectives depends on where we are on the AS curve as shown below.
GNP is rising everywhere 3. Therefore, no need to control population 4. Therefore, promote economic development and population will control itself; people will want fewer children F. Before 1950: population growth always below 1%; now over 2% (due to higher GNP everywhere VIII. Eco-Destruction via the Green Revolution A. Programs to improve agriculture in poor nations B.
In “From Quality to Quantity,” from part two of In Defense of Food, Michael Pollan argues that our food system’s sole focus is on increasing production and profit. To support his argument, Pollan describes the idea of nutritional inflation. It is the fact that people must consume more food to receive the proper amount of nutrients today, whereas, in the 1940s, people were able to consume considerably less, but still gain the fitting amount of nutrients. Going into depth with this point, Pollan references Brian Halweil and his report from 2007 where he traces the problems with today’s nutritionally deficient foods to the very roots. Halweil points out that though the use of industrial fertilizers are producing bigger plants with more yield faster, when one depletes the soil of its numerous necessary nutrients down to a basic three, those grown with the use of the fertilizers will always lose to those developed in organic soils, when comparing nutritional values and benefits.
This does not mean that the government will not invest in educational programs; this just means that the investments from the fiscal policy will be less than compared to infrastructure. Four key elements that were utilized in the simulation and emphasized in the lecture were inflation, recession, unemployment rates, and inflation tax. By inflation we can describe the rapidly increase of prices in the, Erehwon, economy and the decline of salaries, another manner to describe inflation can be the rapidly rise of prices and how incomes have stayed the same, making the consumers purchase less items for the same amount of money or more than before (about.com). Recession can be described as the GDP growth goes negative over a period of two or more consecutive quarters; in addition, current unemployment rates, consumer confidence, and spending levels are all part of the factors taken into consideration when dealing with a recession (recession.org). The factors which contribute to a recession and sometimes a depression are: increase in cost of production, higher costs of energy, and the national debt among many others.
7. Some argue that aid is focused on industrialization causing a greater gap in incomes and living standards between those in that sector and those in the traditional agricultural sector. 8. Aid is often available only if the country agrees to adopt certain economic policies and these often reflect the Washington Consensus policies that emphasize free market principles of liberalization, deregulation and privatization to promote economic growth. These policies might be more in the interest of MNCs and the developed countries rather than the developing countries.
The New Deal laws and regulations affected banking, the stock market, industry, agriculture, public works, relief for the poor and conservations of resources. After making laws and regulations for the rest FDR didn’t forget the farmers and agriculture. On May 12, Congress passed the AAA or the Agricultural Adjustment Act. The act had 2 goals: to help raise farm prices quickly, and to control production so that farm prices could stay up over the long term. In the AAA’s first year the supply of food outstripped the demand.
However, this annual "surplus" is expected to change to a deficit around 2015, when payments begin to exceed receipts and interest thereafter. The fiscal pressures are due to demographic trends, where the number of workers paying into the program continues declining relative to those receiving benefits. The number of workers paying into the program was 5.1 per retiree in 1960; this declined to 3.3 in 2007 and is projected to decline to 2.1 by 2035.Further, life expectancy continues to increase, meaning retirees collect benefits longer. Federal Reserve Chairman Bernanke has indicated that the aging of the population is a long-term trend, rather than a proverbial "pig moving through the python.” The accumulated surpluses are invested in special non-marketable Treasury securities (treasuries) issued by the U.S. government, which are deposited in the Social Security Trust Fund. At the end of 2009, the Trust Fund stood at $2.5 trillion.