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Economics - Macroeconomics Economics Various Economists Essay

… Economics - Macroeconomics


Various economists, both theoreticians and practitioners, have developed and applied concepts and principles designed in order to explain the economic laws that govern the society at some point, and to drive economic growth. Some of these principles include the opportunity cost concept, capitalism and socialism, and the invisible hand principle. The following pages will focus on addressing each of these principles, by explaining them and relating them to the economic situation that currently characterizes the U.S. society.

Opportunity Cost

The opportunity cost concept was developed by John Stuart Mill in order to decrease the level of difficulty in the decision making process. The concept is usually applied in situations where scarce resources must be used as efficiently as possible. Basically, when…. [read more]

Economics: Macroeconomics Chapter

… Economics: Macroeconomics

Explain why net exports and net capital outflow are always equal

There are two fundamental platforms on which an open economy interacts with the world -- the world financial market and the world product market. Net capital outflow (NCO) measures the imbalance in the product market -- it is the difference between the value of domestic assets purchased by foreigners, and the foreign assets purchased by a country's residents. Net exports (NE), on the other hand, is the difference between a country's imports and its exports (Mankiw, 2014). The two must always be equal (NCO=NE) because any transaction that affects the product market affects the financial market by the very same amount.

Illustration: we can take the example of a software programmer resident…. [read more]

Economics Macroeconomics Many Companies Produce for Foreign Term Paper

… Economics


Many companies produce for foreign markets as well as for markets in their home country. Exports are the goods and services that are sold in foreign markets. Imports are goods or services that are bought from foreign producers. In spite of the benefits of international trade, a lot of nations put limits on trade for a variety of reasons (Trade Restrictions and Their Effects, n.d.). The main types of trade restrictions are tariffs, quotas and embargoes.

A tariff is a tax put on goods that are imported from abroad. The effect of a tariff is to increase the price of the imported product. It helps domestic producers of comparable products to sell them at higher prices. The money received from the tariff is…. [read more]

Economics in Basic Terms Research Paper

… In my view, this was a move undertaken by the government in its quest to stimulate growth of the economy after the sustained downturn in economic activity.

However, despite the same being a macroeconomic event, it effectively affected me in that I had to pay more for some of the products I used on a regular basis as retailers promptly reviewed their prices upwards. Hence on that front, and given that my income remained constant, a significant portion of my disposable income was eaten into. This further affected my savings as I had to less money left to save.


In conclusion, it can be noted that microeconomics and macroeconomics remain two important branches of economics. Though both differ in one way or the other,…. [read more]

Macroeconomics Summary in the Eighth Assessment

… Macroeconomics Summary

In the eighth edition of his seminal textbook Essentials of Economics, Bradley R. Schiller provides a comprehensible yet comprehensive review of the theoretical concepts which are central to microeconomics and macroeconomics, while also utilizing relatable real-world examples to reinforce main points. The first chapter of the book is entitled "The Challenge of Economics" and begins by describing the fundamental components of economic study, including the market system which is predicated on scarcity, resource allocation, and the law of supply and demand. According to Schiller's broadly constructed overview of macroeconomics in Chapter 1, "the central problem of scarcity forces every society to make difficult choices about the use of its scarce resources" (2010), and this dilemma specifically forces societies to answer three main questions…. [read more]

Macroeconomics Government Borrowing Essay

… Low interest rates do not help in alleviating the condition of high country debts. This infer that the financial strategy becomes ineffective in revive the situation in the market hence non-essential. Low interest rates in Canada have the capacity to lead to inflation rather than solve the financial crisis in the form immense national debts. This increases the level of borrowing by the public hence increment in the supply of money within the economy. Increase of money supply increases the price of goods and services in the economy hence the rate of inflation. Low interest rates also lower the value of the currency at the international level. Decline in the currency level creates enormous difference between the exports and imports. The imports become expensive in…. [read more]

Macroeconomics the Federal Reserve System Essay

… As being revealed in Fig 5, a decline in interest rates will increase investment opportunity thereby increase aggregate demand from AD1 to AD2. . With increase in aggregate demand, the output will increase from Y1 to Y2. However, the result may lead to an inflation rates.

Liquidity Trap

Overview of the U.S. economy reveals that the United States is in the liquidity trap because commercial bank reserve at the Federal Reserve increased from $20.8 billion in 2007 to $860 billion by the end of 2008, and by the end of 2011, it had increased to $1.6 trillion, which is more than 10% of the U.S. GDP. The great recession in 2008 had been attributed to the increase commercial bank reserve. Between 2007 and 2011, the…. [read more]

Economics the Keynesian Economic Theorists Term Paper

… The economic policies imply that the U.S. is ready to reduce trade deficit, find new markets for locally produced goods, increase industry, and manufacturing, increase foreign exchange, increase income through job creation, and reduce unemployment. This leads to a trickle-down effect as a reduction in budget deficit implies a reduction in trade deficit, which in turn will reduce and end currency manipulation by other major currencies like Chinese Yen. The changes in economic policies imply the U.S. will increase regulation and stringent policies on trade, public budgets, jobs, and investment with the aim of ending currency manipulation that is the cause of the decline and near death of American manufacturing.


Protectionists theory on trade policies argue that international trade contributes to the increase of…. [read more]

Macroeconomics Explain the Difference Between a Change A2 Coursework

… Macroeconomics

Explain the difference between a change in demand and a change in quantity demanded. What causes each of these to occur?

The law of demand states that if all elements are constant, the amount demanded will fall with a rise in price. Conversely, the amount demanded will rise with a fall in price. Hence, there are two factors to consider; First is price and the second is other factors that do not include price. When looking at the demand for a product or service, it depends on several factors like price, income, taste, consumers' preferences, and the price of other related products or services. It is also important to note that future expectations of the price rising or falling as well as target population…. [read more]

Economics the Supply and Demand Essay

… There used to be such Blackberry and Palm, and the demand was relatively low and the prices relatively high. Apple came out with the iPhone and that caused a major shift in the demand curve but only a minor shift in the supply curve. So many people wanted one of these phones, and the prices across the industry remained high. Then, Android phones came onto the market and there were a lot of different types. The demand for the phones was still very high, but supply was increasing to match demand. Some producers began to cut prices in order to entice buyers. Some premium producers did not cut prices, but overall the average price of smartphone decreased. Consumers became more price sensitivie, and the lower…. [read more]

Economic Integration of GCC Countries: Latest Developments Since 2010 Essay

… This indicator is inopportune when focusing on other indicators.

There is also a dangerous debt in non-oil producing countries. They have no choice but to implement the policies. Countries like Bahrain, Saudi Arabia, and Oman are facing pressing challenges when it comes to labor. In these countries, national workforce has been rendered inopportune to deliver since foreign labor (with better services at cheaper rates) especially from India and Africa have recently flocked the labor market. Therefore, GCC is currently pursuing policies, which will seek to replace foreign workers with local workers. To accomplish this, GCC is advising member states to pursue a combination of mandatory of market-based and as well, policies which will seek to promote non-oil economic growth.

Although the population of the GCC…. [read more]

Define Economics Research Paper

… Models enable experiments. For instance, economists can manipulate interest rates to understand their impact or test to see if fiscal stimulus packages will produce the desired results in the economy. The model allows for more definitive statements to be made about causality (Stapleford, 2012).

There are downsides to models, however. They rely on assumptions which are often not based in reality. If the assumptions are incorrect, the conclusions drawn for models will also be invalid (Encyclopedia Britannica, 2009). Thus, it is an important task of economists to constantly refine models and compare them against actual data. By adjusting models in areas that underperform under this comparison, improvements can be made to provide strong insights and intuition into how the world works (Funderburk, 2012).

The debate…. [read more]

Economic Crisis the Revelation Research Paper

… 25%. The attraction for the prospect non-prime buyers evicted from the market perhaps during the first half of the year 2006, the Mortgage Bankers Association discovered the value, and total number, of subprime mortgages that had now gone down 30% on the second half of 2005

4: the fourth that contributed to the bubble burst was the adversity that, as personal saving from disposable income reached up to the level below zero, fewer households had the requisite finance to support increases in debt and the standard of livings of the residents.

The ever expanding consequences of the bubble burst that funneled down to the household of U.S. And ultimately the senate and state. Giving the strong evidence the senate the William Black asserted (Johnson, 2010):…. [read more]

Economics Scenario Essay

… The commercial loan is the same except that it's a loan. These investments are the best because the government of the developing country will have a choice of spending the investment wherever they think appropriate. In this way, the government is able to keep a balance between foreign and international firms in their country. However, these investments have a setback, they put a burden on the developing country as they are a loan. They also disturb the balance of trade between countries. (What Are.., 2003)

These investments will increase the aggregate demand due to increase in investment. These investments will cause the aggregate supply to rise as more efficient ways of production will be evolved. So, the GDP of the economy will increase and the…. [read more]

Economics: Application of Concepts Essay

… These are the reasons that prompted the government to step in.

Had the monopoly succeeded, competitors would have been edged out of the market. Those who would have been affected in this case include carriers like MCI and a host of telecommunication-equipment suppliers. With no competitor to watch out for, AT&T would have been tempted to charge prices higher than those possible in a competitive market. It is also likely that the quality of services offered by the company would have suffered.

Methods of Identifying Customers to be Offered Discounts

In some instances, an attempt by a given company to offer discounts to some groups of customers could have the effect of alienating some of its consumers. To avoid this, business entities should embrace fair…. [read more]

Economics Poem Term Paper

… Economics Poem

My Great Depression"

This is how I think it happened, sir. How I lost

Everything. it's hard to remember, even though it should be Easy to remember how everything is lost. Coins. Company.

Country. First quickly, then slowly, then suddenly again. Dust bowl.

Crash. It won't happen to me. More crashing. Dollars, gold.

Dust. I think it was when people stopped buying, it happened.

Loss, losses. So I stopped selling. So much.

So I let people go. So they lost their jobs. So?

Then the lost jobs stopped buying.

More. So more was lost. I cut. I still lost. Lost my business.

The bank said, no, no more loans. Then all closed.

All businesses. All the doors. Creditors. Banks. My family.

Their hearts,…. [read more]

Macroeconomics Research Paper

… Macroeconomics

Over the last several years, the economy has been through a number of different challenges. Part of the reason for this, is because of shifts that have taken place in: the deficits that many state and local government are running. As a result, this period has been marked by a number of problems to: address the shortfalls that many different governments are facing. One of the more radical approaches took place in Wisconsin not long ago, when the Governor signed a law that would eliminate the employee public unions' collective bargaining rights. This is important, because it shows how the large deficits are having an impact, on the way governments are delivering various services to the general public. As they are seeking out any…. [read more]

Macroeconomics the Ad-As Model Essay

… Either way, there are going to be some positive employment effects as a result of this rightward shift in the aggregate supply curve.

Another theory is that if prices and wages are flexible the economy can move back to full employment. The idea is that if prices and wages have downward flexibility, the economy can move back to full employment. With lower prices and wages, producers will have lower production costs. They will then produce more, shifting the short-run aggregate supply curve to the right. The question is why would they produce more, if the recessionary gap is caused by a slump in demand? If demand is slumping, lower prices is not going to help that, when lower prices are matched by lower wages. Prices…. [read more]

What Economics Term Paper

… Economics - Macroeconomics

Ch4, #6 - Market Forces Supply and Demand - Suppose that in the year 2005 the number of births is temporarily high. How does this baby boom affect the price of baby sitting services in 2010 and 2020? (Hint: 5-year-olds need babysitters whereas 15-year-olds can be baby sitters. (you can use 2 supply and demand graphs if you need to (one for 2010, one for 2020).

The baby boomer generation is right now going through this very situation in regard to social security situation. There are not enough forecast workers to cover the social security demands of the future. But in regard to this example, as the number of births is high, future babysitting services will indeed be affected. In 2010, there…. [read more]

Economics Economy Has Recently Emerged Essay

… By 2012, the economy will largely be left to its own trend, and that is currently pointing to slow growth. In three years, however, growth is expected to be higher. Previous economic slowdowns have resulted in improved growth prospects three or four years post-recession. Thus, above-average growth is expected in three years. In ten years, the trend will be normal, with growth constrained by cuts to the federal budget to deal with rapidly escalating medical costs and with gas prices pushing down growth prospects, since the U.S. is entirely unprepared to deal with higher gas prices.

Previous instances of high unemployment typically take 3-4 years to resolve (in 1986 unemployment was still at 7.0%). Thus, unemployment will not be fully resolved in a year, although…. [read more]

Macroeconomics Models the Classical Term Paper

… While the real wage rate adjusts in the classical model to move the economy to full employment, the real wage rate does not appear in the simple keynesian model and equilibrium is achieved by adjustments in aggregate demand, which equals aggregate income. The equilibrium aggregate income need not imply full employment (Parke, paragraphs 21-30).

Animal Spirits?

The 2001 U.S. recession could fit the Simple Keynesian Model. The dot-com meltdown and the 9/11 shock had psychological as well as economic impacts. Could this be the recession that is due to a failure of animal spirits?

A most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result…. [read more]

Macroeconomics Why Is Economics Essay

… The United States has a large amount of debt and so do its citizens. Therefore, our GDP is artificially inflated.


What are the different types of unemployment? How do they affect the economy in terms of growth, labor force, and price of labor? Cite specific examples to support your response.

There are three types of unemployment, namely structural, frictional and cyclical. Frictional unemployment does not affect the economy that much as it is just people switching from one job to another. Structural unemployment cuts down the cost of labor since the supply of labor is high. Cyclical unemployment does not affect the overall cost of labor.


Identify economic factors that affect the real GDP, the unemployment rate, the inflation rate, and a key…. [read more]

Economics in the United States Essay

… This has increased, though with small margins, the rate of unemployment.

Inflation in the United States

The inflation rate in the United States is likely to be affected by the recession experienced in Europe. The growth rate of China which has also reduced will be an advantage for the U.S. Due to the favorable oil prices and the government incentive to moderate the prices of household commodities like food, the inflation rate of U.S. has a high probability of reducing. The labor cost of the country is quite restrained, hence in check CPI index.

Figure 1.2: Expected percentage change since 2010

Percentage changes from 2010 to 2013 -- predictions (Newport, 2011).

In April 2012, the rate of inflation for the country was 2.30%. The inflation…. [read more]

Macroeconomics in This Case Essay

… The combined fiscal stimulus and open market operations should increase the inflation rate by not only improving the economy but also by signaling to the market that the Fed intends to create inflationary conditions to give the economy more traction for growth. In this situation, I would have a preference for fiscal policy. Monetary policy may not succeed because firms are well below capacity. There is little incentive for them to invest if they have that much excess capacity. Thus, while monetary policy would create the conditions for economic growth, it does not guarantee that actual growth will occur. With fiscal policy, it is guaranteed that the money will be spent and added to the economy.

3. The type of gap that this economy is…. [read more]

Macroeconomics Investopedia Provides a List Essay

… FedEx already knows what happened yesterday, and with its close monitoring of package volume it knows what is happening today as well. The information that the company needs to leverage its operational flexibility is what package volume is going to be tomorrow. Thus, leading indicators are the most valuable. Predictions about GDP, such as those from the Congressional Budget Office, are more valuable than the past GDP figures from the BEA.

2. If the Federal Reserve raised interest rates, this would have two implications. Raising them now would be insane, of course, given the current economic conditions of slow recovery, high unemployment and low borrowing rates. It would signal a dramatic shift in monetary policy. Thus the most reasonable conclusion that can be made is…. [read more]

Macroeconomics What Is Inflation, Stagflation, Recession, Depression Essay

… Macroeconomics

What is Inflation, Stagflation, Recession, Depression, Expansion and Contraction?

Inflation is growth in the value of goods and services that are available to customers. It results in a decline of the purchasing power because one dollar buys lesser worth of goods when the inflation is high. For example, when the rate of inflation is 3%, the cost of one piece of chocolate that was costing $1 before, would cost $1.03 now. Though this is not a significant change, it affects customers when the same amount of increase is applied to all products. This is the reason most Governments try to keep the inflation between 2% to 3%.

Stagflation is more complex than inflation because it is a combination of slow economic growth and high…. [read more]

Macroeconomics With Operations Essay

… However, it is important to note that the reverse is true for the government. With an increase in tax rates, the government rakes in more in terms of real income while a decrease of the tax rates brings about a decrease in real income for the government.

The Big Ideas: Their Application

Idea 1

"Choices involve tradeoffs- we always give something up to get something else"

By their very nature, resources are in most cases scarce. A company like coca cola has therefore to make a tradeoff when it comes to the utilization of its monetary resources. It essentially has to give up something so as to get more of another. A typical scenario in this case would be where the company needs to motivate…. [read more]

Macroeconomics -- Review of Age-Old Term Paper

… Fortunately, this did not occur.

On the other hand, if an economy is booming, the Fed may actually attempt to stem the expansion and reduce the supply of money in the economy. Again, one might ask -- why is it bad to have nearly full employment? (Full employment may be defined as when all individuals looking for work, have work) However, inflation can skyrocket during a sharp period of boom, causing inflation to go rapidly up, spending to go down, production to halt, and thus causing a sharp boom followed by a precipitous bust in the business cycle. The Federal Reserve must cushion the ebbs and flows of the business cycle as much as possible

Today's International Economy -- Conclusions and Speculation for the Future…. [read more]

Macroeconomics Budget Deficits Today Essay

… For example a tax break on the working class, given that the savings rate is around 3.8% (FRED, 2012), is going to be spend, providing a short-term economic boost. This short-term boost is not worth deficit spending, however, if the boost does not lead to long-run economic growth. It might not, especially if there is considerable slack demand in the economy or if businesses perceive the boost to be temporary in nature and moderate their investments accordingly.

Taxes are the wealthy are less likely to be spent, since the wealthy have lower income elasticity of consumption, and but they are likely to be invested. If the investments are overseas, as can happen with the ultra-wealthy, or if the investments do not spur a long-run boost…. [read more]

Macroeconomics Question Essay

… f.) When supply increases and demand decreases: Price decreases and quantity is indeterminate.

g.) When demand increases and supply decreases: Price increases and quantity is indeterminate.

h.) When demand decreases and supply decreases: Price is indeterminate and quantity decreases.


a.) When the Federal Reserve buys bonds, the effect is typically an increase in overall money supply. This example of open market operations results in either the public or commercial banks holding more of their assets in cash reserves, and less in securities, and this increases the money supply. When the Fed buys bonds from commercial banks, these lending institutions see their checkable deposits and reserves increase, and this makes them far more willing to lend.

b.) When the Federal Reserve raises the discount rate,…. [read more]

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