...liberty university econ 214-d08 (Your Name) Econ 214 Problem Set 3 Complete all questions listed below. Clearly label your answers. 1. Will increases in government spending financed by borrowing help promote a strong recovery from a severe recession. Why or why not? 2. Does fiscal policy have a strong impact on aggregate demand? Did the shift of the federal budget from deficit to surplus during the 1990s weaken aggregate demand? Did the government spending increases and large budget deficits of 2008–2011 strengthen aggregate demand? Discuss. 3. What is the current rate of unemployment? (See bls.gov and state the month you are reporting.) How rapidly has GDP grown during the past 3 years? (See bea.gov and state the annual growth rate for each year.) What do these figures indicate about the validity of the Keynesian view? 4. Are changes in discretionary and fiscal policy likely to be instituted in a manner that will reduce the ups and downs of the business cycle? Why or why not? This assignment is due by 11:59 p.m. (ET) on Monday of Module/Week 4. Answer No. 1 In case of financial recession, there is a shortage of funds in the country. The people living in the country do not have enough money and government is also not able to provide enough subsidies to them. One of the ways to avoid the recessionary conditions and ensure better support to the economy is borrowing money from abroad. Borrowing of funds from other countries might...
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...Rachel Wilkinson ECON 214-B14 Prof. Kuo January 28, 2013 Problem Set 1 1) Real dollars for 2010 (largest to smallest real box office receipts, in millions) Star Wars ($1,661.9) E.T. ($903.8) Titanic ($816.4) Avatar ($773.3) Shrek 2 ($504.8) 2) employed, unemployed, or not in the labor force a. Beth is not working; she applies for a job at Wal-Mart last week and is awaiting the result of her application - unemployed b. Juan is vacation in Florida during a layoff at General Motors plant due to a model changeover, but he expects to be recalled in a couple of weeks - not in the labor force c. Bob was laid off as a carpenter when a construction project was completed. He is looking for work but has been unable to find anything except a $10 per hour job which he turned down - unemployed d. Jade works 70 hours per week as a homemaker for her family of 6 - unemployed e. Carson , a 17 year old, works six hours per week as a delivery person for the local newspaper - employed f. Brady works three hours in the mornings at the clinic and for the last two weeks has spent the afternoons looking for a full time job - employed 3) labor force participation rate/ unemployment rate/ employment/population ratio a. Labor Force Participation Rate - 48.7% b. Unemployment Rate - 8% c. Employment/Population Ratio - 40.7% 4) AD and SRAS a. 5400 b. Yes, it is a long run equilibrium level of GDP because the economic profits are zero. The...
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...How Exports impact GDP Tiffany Cook March 19, 2015 Econ 214 (gwartney, 2015) “Gross domestic import is the market values of all final goods and sales” There are various factors that make up the subcategories of the United States, Gross domestic product. This definition tells us how we ultimately arrive at a calculations of the gross domestic products, but it does not shed light on the economies output and input and the benefits or setbacks each service may have. Some ways that we can look at expenditure approach is to know the wealth of what our goods and services can provide, also how these goods and services can be a come up or a setback dependent upon what we do more of. The expenditure approach allows us to see what our consumers have been benefiting from with the goods and services that have been provided to them by the US. Foreigners make up a portion of the GDP with imports, but in order for us to be on the winning side we would have to provide other countries with more of our products for them to buy or consume. Therefore the greatest impact on GDP is what we export in order to gain a profit from the consumer. If we were the consumer we would be looking to do the same. The economies main goal is to make the money and keep more of it. Exports allow us to do more of that, imports gives us resources to supply the source products for us to export. (Deekay, 2009)States that “export instability stimulates inflation. When inflation rises in a country the products tend...
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...Who does inflation help? According to our text “Inflation is the increase in the general level of prices of goods and services”(Gwartney, 2012). Our text goes on to explain that the “purchasing power of a dollar goes down when inflation is present” (Gwartney, 2012). Knowing that the power of a dollar is less one would believe inflation is not really good for anyone in the long run. Inflation can also reduce investments for companies and in some cases slow production of a product or service to a halt. An Economic incentive is any factor (financial or non-financial) that provides a motive for a particular course of action, or stands as a reason for preferring one choice to the alternatives (Cambridge University Press 2013). This shows that non-market production is still an important part of the puzzle when it comes to economics and the incentives that effect our economy on a daily bases. For instance, it can be used to boost the economy in certain areas by given huge taxes breaks. Another way is to allow funding for certain projects in a specific area. In an article written by Brent Balk the cost of labor without a financial transaction is described as “output prices and there for should be considered a marginal costs” (Balk, 2012). He goes on to compare projects being done that show marginal cost and those that don’t. To the best ideas of what the actual cost of a job or project would be one must consider all sides even the non-market production. The bible...
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...Problem Set 4 1) Explain the difference between a budget deficit and the national debt. 2) Use the Marginal Income Tax Rates in Figure 15.6 (see p. 463) to compute the following: a. Tax due on taxable income of $100,000, $200,000, and $500,000. b. Average tax rate on taxable income of $100,000, $200,000, and $500,000. 3) Greece, Ireland, Portugal, and Spain all went through national budget difficulties in recent years. Use the data below to answer questions regarding the sovereign debts of these nationals (All data comes from the OECD and is in billions of current US dollars.). | 2000 | | 2010 | | Debt | GDP | | Debt | GDP | Greece | $138 | $127 | | $455 | $308 | Ireland | $34 | $98 | | $ 124 | $206 | Portugal | $62 | $118 | | $ 203 | $231 | Spain | $292 | $586 | | $734 | $1,420 | a. Compute the debt-to-GDP ratio for all four nations in both 2000 and 2010. b. Compute the average yearly budget deficit for each of the nations over this period. c. In your judgment, which of the four nations was in the worse fiscal shape in 2010? Use your computations from above to justify your answer. 4) Explain the differences between typical demand side fiscal policy and supply side fiscal policy. For each of the following fiscal policy proposals, determine whether the primary focus is on aggregate demand or aggregate supply or both. c. A $1000 per person tax reduction. d. A 5% reduction...
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...Problem Set 3 1. Will increases in government spending financed by borrowing help promote a strong recovery from a severe recession. Why or why not? * Yes. The Keynesian view that private spending will decline during a recession and that the government needs to expand its spending in order to restart the private sector. 2. Does fiscal policy have a strong impact on aggregate demand? Did the shift of the federal budget from deficit to surplus during the 1990s weaken aggregate demand? Did the government spending increases and large budget deficits of 2008–2011 strengthen aggregate demand? Discuss. * Aggregate demand does not depend on fiscal policy. So, therefore it has no impact. * It does not indicate if it had a strong or negative impact or not. * the growth of real output and income during the next decade shold be strong, if the Keynesian are right. 3. What is the current rate of unemployment? (See bls.gov and state the month you are reporting.) How rapidly has GDP grown during the past 3 years? (See bea.gov and state the annual growth rate for each year.) What do these figures indicate about the validity of the Keynesian view? * 6.1% in Aug 2014 * 2011: 1.8 * 2012: 2.2 * 2013: 1.3 It indicates that the GDP has very litte impact than what they expected. 4. Are changes in discretionary and fiscal policy likely to be instituted in a manner that will reduce the ups and downs of the business cycle? Why or why not? *...
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...In the short run, an increase in the money supply will push the interest rate down as money demand fluctuations alter people's desire for liquid assets and thus the prices and rates of return on bonds. In an open economy where interest parity between countries must be preserved the exchange rate will increase (currency depreciation) in order to create the expectation that it will fall faster in the future. This increase in the exchange rate makes domestic goods more attractive, thus increasing both foreign and domestic demand for domestically produced goods. This then encourages output growth. In the long run it will depend on whether the money supply increase is deemed to be permanent or temporary. Unless the change is permanent effects in the long run will not be felt. If the change IS permanent, the following will happen: - As money supply increases, the short run effects described above will mean that output is pushed above its natural level. However, as output is above its natural level, this means that workers and machines are working overtime (AA curve shifts right). In the short run it increases due to an increase in the money supply, but then it decreases in the long run as the real money supply is reduced by price increases over time. However it will not go back to its original level. It will be higher by the same percentage as the money supply has been increased by. Monetary policy has different effects in the short run and the long run. Expansionary monetary policies...
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...1. What is the biblical basis for the Jubilee 2000’s call for the immediate canceling of debts of all HIPCs? a. Leviticus 25:14, “you shall not oppress one another.” (NJKV) Those who are more fortunate, economically, should not be oppressors against those less fortunate. The author also states that Christians should not lend more than they are willing to lose. If we live by scripture than “many common means of collection are unscriptural.” (Stapleford, p.216) God would rather us spread the good news and bring others to the Lord than collect debts. 2. What conditions do you believe should accompany debt relief to developing countries? a. I agree with most of the conditions outlined in Chapter 15. Some of the conditions I believe are the most important are as followed: i. “Active Democracy and participation of civil society in goverance, transparency” (Stapleford, p. 218) Get citizens more involved in affairs. Punish government corruption. Transparent budgets with checks and balances. ii. “Investment by developed countries in technology necessary to foster developing-country development.” (p.219) Many developing countries do not have the infrastructure to fight disease and have very unstable energy sources. They need to invest in technology to give them the tools necessary to have economic growth. 3. Why has the application of the World Bank’s standard Structural Adjustment Policies been counter-productive in many developing countries? a. SAP is more concerned...
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...1. What is the biblical basis for the Jubilee 2000’s call for the immediate canceling of the debts of all HIPCs? The Biblical basis for the 2000s can be found in Proverbs 19:7. The jubilee calls for immediate canceling of all debts of HIPCs. This passage of the bible states that “He who is kind to the poor lends to the Lord, and He will reward him for what he has done”. Heavily impoverish countries were unable to accomplish financial stability so the more fortunate countries gave back to them in the form of erasing debt. According to Stapleford “the total GDP of the HIPC countries equal to seven-tenths of one percent of the GDP of the major multilateral lending nations”. (Stapleford, 2009) When doing the right thing is well within our means and there are responsible parameters so as not to “dump water onto the sand” (Stapleford, 2009) it is our Christian responsibility to do so. 2. What conditions do you believe should accompany debt relief to developing countries? I believe that the conditions laid out by stapleford are responsible and sensible. 1) the spending of the funds saved are to benefit the poor resulting in programs for education, healthcare, infrastructure 2) Must not be at war with a neighboring country or persecuting any religious group or minority 3) A fair and balanced judicial system in place accompanied with a transparent government 4) Export diversification with guaranteed open markets with US and Europe. 5) Elimination of domestic price...
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...Tracey Williams ECON 214 Macroeconomics Christian Ethics Project 1 1. What is the difference between self-interest and selfishness? Why is this distinction important when considering the competitive market economy as appropriate for a society? There is no difference between self-interest and selfishness. Both terms promote the idea of individual advantages over the welfare of society. 2. Does your textbook present only positive economics and avoid any normative economics? If not, give some examples of normative issues covered in your textbook. 3. What did Adam Smith believes serves to curb self-interest in an economy? Adam Smith believes competition serves as a curb on the excess of self-interest, which is also reinforced by the jurisprudence system. The market prices charged by a supplier of commodities and goods are constrained by his or her competition and the wages paid to laborers are bid up by competition amongst buyers. 4. What does it mean to seek the kingdom of God in a democratic capitalist economy? How can it be done? Gods’ kingdom is righteousness, peace and joy in the Holy Spirit and was made available to us through Christ’s incarnation death and resurrection. Jesus doesn’t ask us to set aside our self-interest but instead make good investments instead of poor ones. The market system becomes more productive when it is undergirded by moral values such as trust, honesty, obligation and cooperation. The book goes on to discuss ethics...
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...I was born in Kinshasa, it is the capital of the Democratic Republic of Congo. It is located in Africa, right in the center. It is one of the largest country in Africa with a lot resources. The most known resource that we have is the coltan which is used to make smartphones. I went to high school in Kinshasa at Complexe Scolaire (School Complex) Les Loupiots and I played several sports such as soccer, basketball and tennis. I was the captain of the soccer and second captain of the basketball team. I was not planning on studying in an English program because I knew how hard it would be to learn a new language. Even though we learned English in high school, French was our primary and first language. I choose ISU because my older brother came here before me and was telling me how good the program was and that I would not have difficulties with English if I was willing to learn. I am currently majoring in Business Administration and I am planning on adding another major which might be management. I chose Business Administration because I did not know which concentration fits me well, but I am leaning toward management for my second major. I have four siblings, one sister and three brothers. I am currently living with my older brother here in Terre-Haute. I like to go hang out with my friends and watch sport games. I watch soccer, basketball, football and tennis. I usually go play basketball and soccer at the rec when I have time. I always thought that aviation was what I wanted...
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...Problem Set 5 Liberty University Feb 17 28, 2013 ECON 214 D14 Principles of Macroeconomics 1. What impact will an unanticipated increase in the money supply have on the real interest rate, real output, and employment in the short run? How will expansionary monetary policy affect these factors in the long run? Explain. When income rises, more people are placed in the region above the no tax due cutoff. Others find themselves pushed into a higher tax brackets. Therefore, the process of an economical expansion, revenue from the personal income tax increases more swift than income. Over a short run, this will lead to improved margins in profit for businesses who will lead to the expansion of the output through utilization of more resources. In the short run, unemployment rate will fall. 2. How rapidly has the money supply (M1) grown during the past twelve months? State the rate of growth (use http://www.federalreserve.gov/releases/h6/) and the most recent release, use the seasonally adjusted figures. Calculate the rate of growth across the year by taking the (new amount of M1- old amount of M1)/old amount of M1). Given the state of the economy, should monetary authorities increase or decrease the growth rate of money? Explain why. The Money supply has grown in a steady state. In the year 2013 the rate of growth is: (26-24)/24 = 0.08333. The monetary authorities should increase the growth rate of money. The growth rate in this case is very low and cannot meet...
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...Problem Set 4 Candace M. McDonald (Tomas) Liberty University Online Lynchburg, Virginia Submitted in Accordance With ECON 214 Problem Set 4 What determines whether a financial asset is included in the M1 money supply? First we need to understand that money is a medium of exchange. A medium of exchange is defined as “ an asset that is used to buy and sell goods or services”. What financial assets in our society are considered an asset for buying and selling goods or services? Of course our physical currency, coins and paper bills fall under this category. Besides currency, most daily transactions are through some sort of checkable deposits. Checkable deposits are split into two different categories, demand deposits and checkable deposits. Then lastly, traveler's checks are used for payment and is considered under M1 money supply. These four financial assets have one thing in common. They can be used for payment essentially right away. No conversions are necessary for payment to be accepted. Once a financial asset needs to be converted into a checking account or cash this would fall into M2 money supply. Why are interest-earning checkable deposits included in M1, whereas interest-earning savings accounts and Treasury bills are not? Interest-earning checkable deposits fall under M1 because the financial asset is instant funds or cash. Interest-earning savings accounts and treasury bills need to be converted to cash or available...
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...December 2015 - FINAL EXAMINATION SCHEDULE Please verify the location of your exam below. CAREFULLY ensure that you note the correct room according to your LAST NAME ACCT Sec Title ACCT 351 001 Intermediate Financial Acct 1 ACCT 351 Time Prof. FROM Dec 21 6 pm Tsang Aaa - Zzz GYM main gym 20-30 002 Intermediate Financial Acct 1 Dec 21 6 pm Tsang Aaa - Zzz GYM main gym 20-30 ACCT 351 003 Intermediate Financial Acct 1 Dec 21 6 pm Tsang Aaa - Zzz GYM main gym 20-30 ACCT 352 001 Intermediate Financial Acct 2 Dec 21 9 am Cecere Aaa - Zzz ENGTR 0100 ACCT 354 001 Financial Statement Analysis Dec 22 2 pm Scott Aaa - Zzz GYM Fieldhouse 28-31 ACCT 354 002 Financial Statement Analysis Dec 22 2 pm Scott Aaa - Zzz GYM Fieldhouse 28-31 ACCT 361 001 Management Accounting Dec 11 2 pm Parent Aaa - Zzz GYM main gym 1-11 ACCT 361 002 Management Accounting Dec 11 2 pm Parent Aaa - Zzz GYM main gym 1-11 ACCT 361 003 Management Accounting Dec 11 2 pm Parent Aaa - Zzz GYM main gym 1-11 ACCT 362 001 Cost Accounting Dec 17 2 pm Levy Aaa - Zzz GYM Studio 1 1-3 ACCT 385 001 Principles of Taxation Dec 15 2 pm Goldsman Aaa - Zzz GYM BLEACHERS 1-5 ACCT 385 002 Principles of Taxation Dec 15 2 pm Goldsman Aaa - Zzz GYM BLEACHERS 1-5 ACCT 453 001 Advanced Financial Accountin Dec 14 9 am Scott Aaa - Zzz GYM main gym ACCT 463 001 Management Control Dec 11 2 pm Levy Aaa - Zzz GYM Studio 2...
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...MONEY SUPPLY CHARLIE MITCHELL ECON 214-D16 “A feast is made of laughter, and wine maketh merry: but money answereth all things.” Ecclesiastes 10:19 KJV In order to define the “Money Supply” in the United States, one must first determine what is money? Milton Friedan defines money as, “money is whatever is generally accepted in exchange for goods and services – accepted not as an object to be consumed but as an object that represents a temporary abode of purchasing power to be used for buying still other goods and services (1992).” According to Anna Schwartz, “the definition of money has varied. For centuries, physical commodities silver and gold, served as money. Later when paper and check-able deposits were introduced, they were convertible into commodity money (2008.” People have done UN-scrumptious things to obtain money for various reasons. Little do they know of its value, other than it can buy what they desire? But, if we take a closer look inside the United States Monetary System governed by The Federal Reserve, often called “FED.” Or, in other words The Central Bank in the banking industry. It is The FED, not the Treasury Department that controls the money supply in The United States. By employing various methods that affect the goods and services, resources, loanable funds, and the foreign exchange markets. All these markets are influenced in some manner or another, by the money supply demands. Money supply being, “a group of safe assets that household...
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