Roberto Del Toro Mrs. Fortier Macro Economics 8 December 2009 Chapter 13, Week of November 30, Chinese overinvestment could strain trade 1. According to the article, the increase in investment will ultimately lead to lower prices for Chinese goods because of overcapacity. Explain in terms of the aggregate demand and aggregate supply model what would have to happen for this scenario to take place? Well first the aggregate supply is the total of all planned production for the economy. The
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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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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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dropped level of foreign investment caused by the global financial crisis as well as a desire to increase levels of employment within the manufacturing sector. It continues by drawing attention to the resultant competitive issues that may be caused by such a move as well as issues that may arise due to inflation. It also draws attention to the tendency for foreign investment to result in less government intervention which may affect the industry in the longer term. It is recommended that: *
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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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Lecture 6 and 7: The Aggregate Expenditures Model Reference - Chapter 7 learning OBJECTIVES 1. The factors that determine consumption expenditure and saving. 2. The factors that determine investment spending. 3. How equilibrium GDP is determined in a closed economy without a government sector. 4. What the multiplier is and its effects on changes in equilibrium GDP. 5. How adding international trade affects equilibrium output. 6. How adding the public sector affects
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