• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Various Macro-Economic Questions and answers

Extracts from this document...

Introduction

27th Jan (ARG) Explain the difference between micro and macroeconomics? Microeconomics is looking at individual segments of the economy, looking at the effects of certain company?s actions such as social costs and benefits, macroeconomics is looking at the economy as a whole. Macroeconomics covers the objectives of the government such as growth, inflation, balance of payments and employment. These are all causes of the actions of the economy as a whole, such as growth is the increase in production over the whole economy, inflation is a general rise in the price level across the whole UK market and employment is an effect and cause of aggregate demand. What is ?economic activity?? The actions of the economy as a whole, it is the input, production and output of all of the individual firms in the economy. It covers all sectors, primary, secondary, tertiary, private and public and can be defined as: ?the process of producing a good/service and for it to then be exchanged in a market place? Economic activity comprises all activities involved in producing goods and services for sale in the marketplace. Explain in detail the main economic objectives of a government. Why are they desirable? To maintain full employment or aim to achieve as higher employment as possible. High employment/ low unemployment is key to a healthy economy because high employment means national income rises, stimulating demand and therefore welfare of firms across the country. ...read more.

Middle

Explain the term ?Economic Cycle? Economic cycles are the typical changes in an economy over time. Periods of rapid increase in growth (Boobs) are averaged out by periods of slower increase in growth (Busts). The time between one boom and another is typically 5 years. But in the long run we can see that the economy is steadily growing. Explain with a diagram the term ?output gap? The output gap is the difference between potential GDP and actual GDP. If this number is positive, it?s called an inflationary gap as aggregate demand is outweighing aggregate supply, possibly creating inflation. If the number is negative, it is called a recessionary gap-possible signifying deflating. This is the output gap. ________________ By 2nd Mar (ARG) Other than a rise in GDP, what factors determine economic welfare? Explain them. Economic welfare is measured in different ways. Factors used to measure the economic welfare of a population include GDP, literacy, access to health care, and assessments of environmental quality. Explain in detail the problems associated with economic growth Stress and polution are the main problems, as economic growth Explain in detail the components of aggregate demand? Aggregate demand is composed of several components: Government spending, which is an injection into aggregte demand and thus if government spending rises, so does demand. ...read more.

Conclusion

producer ? for example an increase in taxes designed to meet the government?s environmental objectives will cause higher costs and an inward shift in the short run aggregate supply curve. A rise in VAT on raw materials will have the same effect. Explain what is meant by ?equilibrium in the economy?? Where supply equals demand so neither the suppliers or the consumers need to change anything as all demand is being supplied and all supply is being consumed so everyone is happy, this is only a constuct though and cannot exist in the real world. How is ?short run equilibrium,? different to ?long run equilibrium?? A market can exist is short run equilibrium for a short time but long run equilibrium is much harder to achieve and can only really be achieved through a thoroughly planned economy. What is ?consumption?? Explain how is consumption related to income Explain the main determinants of consumption Explain the main determinants of saving By 30th Mar (ARG) Investment What is ?investment?? How is it different to ?saving?? Explain the Marginal Efficiency of Capital theory Explain the factors that affect the level of investment What is ?the accelerator?? How is it supposed to work? Supply side policies What is meant by ?a supply side policy?? Give three examples of such policies and explain in detail how they are supposed to work. Explain the limitations of supply side policies ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Macroeconomics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Macroeconomics essays

  1. Marked by a teacher

    The aim of this essay is to discuss the relevance of John Keynes to ...

    5 star(s)

    The laissez-faire approach to the economy has failed the UK economy and given rise to Keynesian theories. However, it can be argued that Keynes is not the ultimate solution. Keynes supported the idea of implementing fiscal policy in order to stabilize the economy.

  2. Explain what the main macroeconomic policy objectives are and why are there problems when ...

    Cost inflation is more likely when unemployment is falling to low levels. In this circumstances there will be shortages of skilled labour. This means that businesses may have to offer higher pay to attract and retain their best workers when they are looking to expand their output.

  1. What are the main macro-economic policy objectives?

    It affects people's inequality. As we know high prices occurred in the market as the investment increase, or business activities increase. For the instance, the income should be re-distributed. It may affect the people whom might get the benefit or not.

  2. Comparing the effects of immigration on GDP in Malaysia, Japan and South Africa.

    ( Please refer to attachment 2.0 as reference.) 3.2 Number of Immigrants, Unemployment and Crime Incidents Malaysia has been hosted about two millions of documented and undocumented immigrants. The decrease of number of foreign immigrants in year 2001 had

  1. How have the Rates of Inflation in the UK Changed Since the Monetary Policy ...

    economy since then it is hard to tell the effect that they could have. Graph 7 Graph 7 shows how consumer confidence has changed over the last four years. This can be useful because consumer confidence is measure of the consumer consumption and that is the most important part of aggregate demand.

  2. Budget 2004-05 and Economic Analysis of Pakistan

    * Public sectors enterprises continue to bleed the budget and limit the fiscal space needed for social sector spending. An accelerated privatization of such units coupled with restructuring to reduce their losses is essential to contain this menace. * Significant evidence is emerging indicating that the country's growth potential is

  1. ECONOMICS PAST PAPER QUESTIONS WITH ANSWERS - price elasticity and inflation.

    ANS 2:- In a market economy resource allocation is carried out by private individuals only. All factors of production are privately owned and managed. There is no government intervention and everyone is free to operate according to his will and desire.

  2. Unemployment, inflation, economic growth and balance of payments have close relationships with aggregate demand

    A trade deficit would suggest that the exports are less than imports and a surplus would indicate that the country is exporting more than it imports. Balance of payments deficit is a situation in which debits exceed credits which leads to a shortfall of foreign currencies and causes problems.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work