Discuss how rising oil price might affect the macroeconomic performance of an economy (25 marks) In economies, oil is a highly desired resource that plays a key role in the production of goods and services and in the provision of energy, meaning that even small fluctuations in its price can lead to supply side shocks for nations as well as lower demand for imports as a component of aggregate demand. A supply side shock is a shock that will shift the Aggregate supply curve and in the case of oil
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definition of macroeconomic performance • components of the macroeconomy • economic growth • price level • employment/unemployment • the balance of payments on current account assuming improved productivity benefits unit costs • labour productivity and how it might affect one or more of the above components • the productivity gap • the UK experience • the significance of the rate of inflation • the significance of exchange rate trends • the significance of macroeconomic conditions in
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The UK’s macroeconomic performance can be measured in terms of economic growth, inflation, unemployment and the balance of payments on the current account. One importance of higher labour productivity in the UK is that it means that each member of staff produces more output in the same given time period which will improve the economies position on the PPF by moving closer towards the curve. This is because the economy will be producing more output with the same amount of resources available which
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make a choice from the scarcity. All economic choices can be summarized in three questions: What gets produced? How is it produced? Who gets what is produces? Economists define their work in micro and macro perspective. Microeconomics and Macroeconomics are the two major branches of economics. What is Microeconomics? Microeconomics is the study of how households and firms make decisions and how they interact in markets. So all these problems belong to microeconomics: how the consumer reacts
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9/26/2012 Lecture 1 – Introduction to Macroeconomics • Key concepts of macroeconomics Key concepts of macroeconmics • Macroeconomics is the study of the behavior of the economy as a whole. • Aggregate demand and supply What is an economy? -> Google images search: Vietnam Economy • Economy: An economy consists of the economic systems of a country, which allocate the labor, capital, and land resources for manufacturing, production, trade, distribution, and consumption of goods
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Fundamentals Of Macroeconomics Macroeconomics is the study of behavior of the economy. Macroeconomics is an economy-wide phenomenon like the changes in unemployment, inflation, gross products and price levels. Some vocabulary learned from macroeconomics that is important to learn about will be stated next. First gross domestic product this is the value of finished goods and services produced within in a country’s borders in a certain time period. This is usually calculated on an annual basis in
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two industries that are chosen for comparison in this paper are the airline industry and the utility industry. To compare these two industries, macroeconomic variables will be used. The macroeconomic variables are gross domestic product, unemployment rate, inflation, employment costs, and consumer prices. Gross domestic product, the first macroeconomic variable, is the comprehensive measure of the total market value of all currently produced final goods and services within a country in a given
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EFF01417:6264_ch01:Pg 0:23907#/eps at 100% *23907* Fri, Nov 9, 2001 11:52 AM part I Introduction User SONPR:Job EFF01417:6264_ch01:Pg 1:21266#/eps at 100% *21266* Fri, Nov 9, 2001 11:52 AM C H A P T E R The Science of Macroeconomics The whole of science is nothing more than the refinement 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
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Fundamentals of Macroeconomics Paper Carolyn Powell ECO/372 June 17, 2013 Fundamentals of Macroeconomics Gross Domestic Product, also known as GDP, is used as an indicator of the economic health of the country. Real GDP can account for changes in price level, and provide more accurate figures. Nominal GDP measures total value of output produced using prices of that time period. Unemployment Rate can be known as the percentage of labor force with no job, but yet actively looking
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inflation? Does GDP measure society’s well-being? 1 Micro vs. Macro Microeconomics: The study of how individual households and firms make decisions, interact with one another in markets. Macroeconomics: The study of the economy as a whole. We begin our study of macroeconomics with the country’s total income and expenditure. MEASURING A NATION’S INCOME 2 Income and Expenditure Gross Domestic Product (GDP) measures total income of everyone in the economy. GDP
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