returns. Consumers will be able to purchase those non-necessity items such as cars and businesses can obtain new contracts or expand. American products will be chosen for purchase over products made abroad because of the lower price. This will in turn cause other countries to purchase more from the United States due to the lower price. In retrospect, the rising of the
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Fundamentals of Macroeconomics Paper ECO/372 Amy J. Eulett March 4th, 2013 Dr. Mike Thirtle There are many differences between the gross domestic products (GDP), the real GDP, the nominal GDP, the unemployment rate, the inflation rate, and the interest rate. There are also many different examples of economic activities. Groceries, massive layoff of any employees along with any decreases that may accrue in the taxes are all activities that can affect someone’s business, someone’s household or
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Assess the consequence for the UK economy of a significant fall in investment spending. (25) Investment is the spending on adding to the capital goods. The UK economy is assessed by its macroeconomic objectives such as economy growth, unemployment, inflation and trade. The change in investment will affect the UK’s economy both in short term (changes in AD) and long term (changes in productive possibility LRAS). Extract B line 8-10 suggested that ‘Weaker demand makes investment less profitable and uncertainty
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Topic 2 – Australia in the global Economy Outline the causes of a decrease in demand for the Australian dollar, and discuss the impacts on the Australian economy of a sustained depreciation of the Australian currency. The exchange rate is a measure of the value of a currency relative to another and is influenced by the demand and supply of the Australian Dollar (AUD). Changes in any of the factors that affect supply and demand causes the AUD to rise or fall. The demand for the AUD is derived
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of everyday thinking. — Albert Einstein 1 O N E 1-1 What Macroeconomists Study Why have some countries experienced rapid growth in incomes over the past century while others stay mired in poverty? Why do some countries have high rates of inflation while others maintain stable prices? Why do all countries experience recessions and depressions—recurrent periods of falling incomes and rising unemployment—and how can government policy reduce the frequency and severity of these episodes? Macroeconomics
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the population of Greece or Portugal (each of which has 10.8 million people) and more than twice the population of Norway (4.7 million). It’s important we find out the different types of unemployment, the causes of unemployment, and the effect is has on the economy. To learn more about the causes and effects of unemployment we must first determine the different types of unemployment. There are three different major types of unemployment; frictional, structural and cyclical. In the case of frictional
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factors: A. Exchange rates can affect an exporter's competitiveness. When inflation occurs in the U.S., currency goes down in value market and profit growth in Asia. It causes an increase in exports. 2). Technological factors: A. The development of infrastructure and technologies will help Asher to save production costs. B. Genetic engineering will help the poultry industry to improve the nutritional value of feedstuff and cause broiler chickens to grow very quickly. This is beneficial for reducing
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Supply Evaluate the extent to which an increase in aggregate demand may affect real output, inflation and unemployment. [25] Real output is an abbreviation for Real Gross Domestic Product or (Real GDP) is a macroeconomics measure of the value of economic output adjusted for price changes, this adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output. Inflation is the increase in general price level over a sustained period of time. Then unemployment
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country minus inflation. Without economic growth it is very difficult to make any meaningful and sustained reduction in poverty. This is especially important in developing economies because it reduces unemployment, budget deficits and it enables an increase in social spending without an increase in tax rates. I believe my rationale for the use of the reserve requirements should be used only when needed. Lowering the requirements will increase the money supply, which may cause inflation. The alternative
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some event (usually political in origin) reduces the supply of the crude oil flowing from the region, the prices of oil rises around the world. Because they think that it would be much profitable to them. But since the U.S is much affected to the inflation of the oil it is not favourable for them. U.S. firms that produce gasoline, tires, and many other products experience rising cost, and they find it less profitable to supply their output of goods and services at any given price level. The result
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