One thing we can be sure of is that a business cycle affects different sectors of our community in different ways. Gross domestic product is a great measure of an economies growth. The chair of the Federal Reserve uses information gathered from GDP to assist with making necessary adjustments to keep a balance between inflation and unemployment.
If exports were to increase this would result in an increase in AD, as the balance of payment is a factor. The subsequent result of this increase in AD would mean an increase in supply, leading to an increase in the rate of employment, as firms are forced to take on more workers in order to fulfil demand. This means that the increase in exports would reduce specifically cyclical unemployment ( demand deficient unemployment). This is because the increase in exports would result in a increase in AD, hence curing the deficient demand. Furthermore, the cost of the formerly unemployed, i.e.
Explain the viewpoints of classical and Keynesian economists. How did the economy that existed at the time of these theories influence them? Which theory is more appropriate for the economy today? Why? With classical economists believe that people supply things to the economy so they have income to demand things of value they supplied.
It helps me predict the effects of the business cycle (Seasons or GDP when income levels rise or fall) on my sales. Currently we are in a slowed economy. Therefore, we have more unemployment or people watching their money more carefully and are more interested in price shopping. g. You obtain this information the % change in quantity demanded divided by the % change in the consumer’s income. Necessity will drive the income demand first and then as necessities are met and money increases, then luxury item demands will begin to increase.
Fiscal Policy captures the changes in taxes and government spending. In the United States, the president, and Congress make these decisions. Because of its ability to affect the total amount of output produced (GDP), Fiscal policy is an important tool for managing the economy. Its ability to affect the total amount of output produced raising the demand for goods and services is the first impact of a fiscal expansion and this increased demand leads to increases in output and prices. The level to which higher demand increases output and prices depends on the state of the business cycle.
B) The study of how consumers spend their income. C) The study of how producers decide what inputs to hire and what outputs to produce. D) The study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and the incentives that influence and reconcile those choices. E) The study of how consumers and producers meet each other at the market. Answer: D Diff: 1 Topic: Definition of Economics 3) Which of the following is a microeconomic topic?
Economic growth involves the rise of output in an economy by using gross domestic product (GDP) to measure ‘the total value of everything produced in an economy in a time period (…)’ (Fribbance, 2009, p. 21) Research on happiness outlines the limitations and complexity of people´s well-being on a global basis. 2. Scientific perspectives on wealth and happiness The claim that there are connections between economic growth, wealth, health and happiness has led scientists to conduct research on this topic. There are various findings either supporting or opposing the claim that one factor has an impact on the other. 2.1 Supporters of the more wealth = more well-being claim Indur Goklany: The improving state of the world: Why We Are Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet Stevenson and Wolfers: Economic Growth and Subjective Well-Being Goklany points out that people live in a better place now
Exploring the Keynesian framework, Harrod-Dommar model points out some dynamics of growth. For instance, to determine equilibrium growth rate in the economy, the balance between supply and demand for a country’s output should be maintained. On supply side, saving is a function of the level of GDP. Investment is an important component of the demand for the output of an economy as well as the increase in capital stock. Therefore, the equilibrium rate of growth is given by matching proportionate change in output with the ratio of savings-output to that of capital-output.
The services provided by welfare states differ from country to country, some have highly developed systems than others (Giddens, 2009). In most societies, poverty and social exclusion at the bottom are alleviated by the welfare states. This essay is therefore going to discuss how these welfare states use ideological state apparatus to secure legitimacy of continued inequalities in capitalist societies. Ideology can be defined as shared ideas or beliefs which serve to justify the interests of dominant groups” Giddens (1997:583). Its relationship to power is that it legitimizes the differential power that groups hold and as such it distorts the real situation that people find themselves in.
Investment projects, via the multiplier effect should result in an increase in the GDP of the economy; However in order to undertake investment, there must a high savings ratio must be obtained as it is essential for the accumulation of capital. Labour plays a critical role in achieving economic growth. The higher the number of workers there is in an economy should lead to economic growth. If there are more people working and unemployment levels are relatively low, then there is likely to be the achievement of economic growth as human resources