fact the equity market performance is dependent upon the earnings growth of the companies and the earnings growth is somewhat capped by the real GDP growth of the economy as a whole. In other words, the equity markets are not to be conceived as a medium which could generate supernormal returns; instead, the return could be capped at about 4% over the real GDP return. Review The article highlights the fact that an economy will attract investments as long as the marginal return (represented by the marginal
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all of the calculations. Round all decimals to the nearest hundredth if necessary. GDP Measurement 1. The expenditure approach tells us that GDP = Consumption + Investment + Government spending + Net exports Following is a link of the national income accounts released by the US Bureau of Economic Analysis. Various statistics of GDP are provided in around 10 tables. Find the corresponding numbers of nominal GDP, consumption, investment, government spending and net exports for 2010. Verify whether
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productivity growth and the avoidance of a zero-sum society form the most important macroeconomic challenge of all • Aggregates o The totals of the economy (3 central concepts) o Use simplified theories to ignore differences among households • GDP o Higher the level of output, lower the unemployment rate o Higher the level of output, faster
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Macroeconomic Short Answer Questions Student’s Name: Professor’s Name: Institution Affiliation: Course Title: Date: 1.2 Suppose the consumption of a good entails rather sizable spillover benefits. How might the resulting misallocation of resources be corrected? Spillover benefits refer to both costs and/or benefits that individuals or groups of people reap through the production or consumption of goods and serves, although they are these person(s) do not take part in decisions that
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which are; * Gross domestic product (GDP) * Real GDP * Nominal GDP * Unemployment rate * Inflation rate * Interest rate The second part will consist of three different economic activities in which I will describe how each affects the government, households, and businesses. The three activities include; purchasing of groceries, massive layoff of employees, and decrease in taxes. The first term is Gross domestic product (GDP). The GDP has been used as an indicator as to how
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levels. Gross domestic product (GDP) A major term to understand is the gross domestic product which is also known as the GDP. The GDP is the market value of services and final goods that are produced in the economy and the stated price in the given year (Colander, 2010). As people produce goods and earn income from selling those good, the economy grows. Economic growth usually means that a person income increases from one year to the next. Real GDP The real GDP is an inflation adjusted measure
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Inequality and Growth in a Panel of Countries* Robert J. Barro, Harvard University June 1999 Abstract Evidence from a broad panel of countries shows little overall relation between income inequality and rates of growth and investment. However, for growth, higher inequality tends to retard growth in poor countries and encourage growth in richer places. The Kuznets curve—whereby inequality first increases and later decreases during the process of economic development—emerges as a clear empirical
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discussed will be based on how an increase in government expenditure affects the aggregate expenditure curve, what is the result of this on the GDP gap and also its effect on the inflation rate. Economic theories prove that an increase in government expenditure shifts the aggregate expenditure curve upwards which increases total aggregate expenditure and real GDP. I disagree with COSATU and think that it was not advisable to increase government expenditure during the 2007 and 2008 financial periods based
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degree of an economy’s openness. One of the common indicators is the percentage of trade as a share of gross domestic product (GDP). It is the sum of exports and imports of goods and services measured as a share of GDP. (World Bank, 2013). This essay will firstly generally examine the degree of openness for various countries by using the percentage of trade as a share of GDP. It will then outline Singapore as the most open country, Brazil as the least open country and the most rapidly increased openness:
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Gross Domestic Product (GDP) is an estimated value of the total worth of a country’s goods production and services, within its geographical boundary, by its local and foreign companies, calculated over the course of one calendar year. However, for various reasons, GDP omits certain measures of overall economic well-being. There are some limitations of GDP such as the changes in quality and the inclusion of new goods, leisure time and human effort costs, underground economy, economic bads and not
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