Question 3 Oil prices and U.S. GDP both fell in 2009. Use a graph to explain this observation of falling oil price and falling GDP. In 2009, world economy encountered one of the most severe downturns due to financial crisis incurred in 2008. The crisis resulted in a period of deflation (refer to Exhibit 1) and failing consuming confidence, which cause a fall in aggregate demand. Decreasing demand shifted the AD curve to left, from AD0 to AD1 (refer to Exhibit 2) so that GDP decreased to Y1.
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Economic and Monetary Union and adopted the Euro To facilitate discussion the 20 year period will be divided into two parts: the 1989-1999 period, and the 2000-2009 period. 2 1989-1999: securing EMU membership The 1989-1993 sub-period: Macroeconomic developments Weak economic activity (1.2% average growth) Very high inflation (16.8% annual average) Very high real and nominal interest rates Low fixed investment (1.5% annual average) Fiscal developments Very high general government deficits
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where businesses operate, factors such as family, education, religion etc. impacts the way a business is conducted. Economic environment within a business organization include factors that are divided into two categories, macroeconomics and microeconomics. Macroeconomics includes factors that are related to sectors or individuals and businesses of particular
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Homework Week 6 Answers The homework is worth 20 points, so each answer will have points distribution at the instructor’s discretion. Chapter 14 1. a. Given that the interest rate has been 4 percent for the last ten quarters, then for IS curve I, real GDP equals 8,800 − 25(4) − 25(4) − 25(4) − 25(4) − 20(4) − 20(4) − 20(4) − 15(4) − 15(4) − 10(4) = 8,000. For IS curve II, real GDP equals 8,400 − 5(4) − 5(4) − 5(4) − 5(4) − 10(4) − 15(4) − 15(4) − 15(4) − 20(4) = 8,000. b. For IS curve
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Evaluating the tax incentives for foreign investors policy Reporting to the Manufacturers league Executive Summary This report has been written in response to the government’s proposed tax incentive policy for foreign multi-national corporations to increase foreign direct investment within Australia. The report draws attention to the reasons behind the government’s proposal. These include the slow growth trends of the manufacturing industry, restoring the dropped level of foreign investment
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1. Balance of Payments. a. The current account is having different elements which create it and these elements are * The balance of trade * Amount of payments of interest to foreign investors and from foreign investment * Payments from international tourism * Private gifts and grants. b. The capital account is composed of all capital investments made between countries, including both direct foreign investment and purchases of securities with maturities exceeding one year
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Macedonia: Economic History and Current Economic Environment The economy of Macedonia was almost none existent before its independence in 1991. During the period of the former Republic of Yugoslavia control “Macedonia only produced 5% of the total output of federal goods” (CIA, Macedonia Economy-overview), compared to all other former Yugoslav states. In Macedonia from 1991-1996 the economy was very unstable due to no government aid, which it formerly received from the Republic of Yugoslavia
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10/22/12 10.2 saving investment and the financial system Economic growth depends on the ability of firms to expand their operations and adopt new technologies Firms lacking sufficient funds to finance expansions and/or the adoption of new technologies may acquire funds from households through financial system Financial system: the system of financial markets and financial intermediaries through which firms acquire funds from households. Economics growth is impossible without a well-functioning
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policy makers. At the outset, it says: “policymakers should optimally consider both their sovereign assets and liabilities together with their macroeconomic objectives, when setting up an SWF.” On “ What is a Sovereign Wealth Fund?” section of the paper, the authors provides the definition of SWF by stating that these Funds are created for macroeconomics purposes in order to “ to hold, manage, or administer financial assets to achieve financial objectives”. On the next section, “When to Set
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produce. Additionally the demand for labour is influenced by the level of economic activity, the productivity of labour and relative cost of labour compared to capital.[2] The demand and supply of labour are influenced by both macroeconomic and microeconomic factors. Macroeconomics refer to conditions in the whole economy affecting the general labour market. Microeconomic factors include specific industry and company conditions that influence the demand and supply of labour for particular occupations
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