A primary use of the PPI is to deflate revenue streams in order to measure real growth in output. A primary use of the CPI is to adjust income and expenditure streams for changes in the cost of living. The different uses because definitional differences that can be categorized into two critical areas: the composition of the set of commodities and services they include and the types of prices collected for these
Variations in business cycles are able to be seen as short-term and long-term progression developments and they could shift. Cycles are calculated using the real gross domestic product of a country. Not like the more organized phases of economics, business cycles do not follow a foreseeable or mechanical form. However, they should be factored into considering an economy.
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.
Therefore, understanding exactly how monetary policies will affect the economy is extremely important. Monetary policies generally will raise or lower interest rates, which will ultimately affect individuals and business demand for goods and services. Unfortunately, many individuals do not understand the entire concept surrounding the Federal Reserve real interest rate. For example, any magnitude of decreasing the real rates will lower the cost of borrowing; this will increase investment spending, and influence individuals to buy durable goods. These items may consist of automotive, recreational vehicle, homes, and higher educational opportunities.
Governments may choose to increase minimum wage on an arbitrary basis, making it difficult for companies to hire individuals at a consistent market rate. Government price controls distort the economic theory of supply and demand. Supply and demand is a significant underlying feature of free-market economies. This theory allows individuals and businesses to make decisions based on self-interest. Businesses often pay individuals a wage based on current market standards.
ECO 372 Week 2 DQ1 How does is the difference between real GDP and nominal GDP affect you? Or if it doesn’t, why not? Which one do we use to measure growth (or shrinkage) in the economy, and why? What does a change in GDP mean to you and your family? Answer: How does the difference between real GDP and nominal GDP affect you?
Why are capital gains and dividends taxed at a different rate than ordinary income? Has this always been the case? Discuss the economic and social implications the changes in tax rates for capital gains and dividends. Do you think the existing policies are fair? Why or why not?
Population stabilization is not necessarily easy to achieve though. Birth control and family planning are great ways to help slow population growth. This works in multiple ways, but the most successful approach is to educate the people and allow them to make their own informed decisions on this subject. All nations need to address population stabilization though, including developing nations, as this is a key role in global efforts for sustainability. “The ideological split between developed and developing countries was a thing of the past – all agreed that population growth must be dealt with in order to make progress in reducing poverty and promoting economic development.” (Wright & Boorse, 2011) A well-developed economy’s population stabilizes itself.
Aakash Patel Dr. Richard Scotch Sociology 4372 12/10/14 Why haven’t we made a change? America has the best doctors and the best medical facilities, but the overall health care system is ranked pretty low. The country does not take full advantage of the resources that we have due to a broken health care system in the country. T.R. Reid shows that other countries has a lot better health system than does the USA and we could learn from them.
The local economy and the global forces and economic pressures have affected people’s prospects in achieving a rich lifestyle and rely heavily on government entitlements and programs which so many criticize as going in the wrong direction. But in reality, entitlements like Medicaid, food assistance (SNAP), Medicare and Social Security have helped so many Americans survive through these hard times, although many of these programs do not form part of the American Dream in many minds. In the past many Americans depended on manufacturing jobs for their livelihood. When they got a job, there was a great amount of certainty that they could rely on it to progress and sustain a healthy lifestyle for their family to buy a home, car and everything that came with it. Today those jobs have gone to other developing nations who can afford to hire employees at low wage.