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

    In 1980 to 1990, inflation occurred, there was an unforeseen inflation followed by deflation, so it created the uncertainty, which obstructed the business decision-making. However, Inflation is a good sign for the recovery of slump economy, but Government should keep it in the acceptable level which is around 2.5%.

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

    4.2 Number of Immigrants, Unemployment and Crime Incidents As shown in Attachment 3.1, the number of immigrants in South Africa increases rapidly in year 2000 to 2004. There was 36.86% of increase in number of immigrants from year 2000 to 2001.

  2. Budget 2004-05 and Economic Analysis of Pakistan

    is estimated at Rs 423836 million which is 60.5% of the current expenditure. * The provincial share in federal receipts is estimated at Rs 239157 million during 2004-2005 which is 13.12% higher than the revised estimates for 2003-2004. * The size of Public Sector Development Programme for 2004-2005 is Rs 202000 million.

  1. Pakistan is in the grip of a serious energy crisis that is affecting all ...

    although NEPRA is a government authority to settle the tariff issues but the fact remains that once the question of WAPDA comes the authority has a very little influence. EXPLORING COAL Pakistan is blessed with large amount of the coal.

  2. Outline any two main/priority issue that concern the Australian economy & discuss the effectiveness ...

    country, they may reduce the country's international credit rating (which reflects confidence that world financial markets have in that country). A downgrading in Australia's credit rating would make it more difficult to borrow funds internationally and would increase the cost of borrowing by forcing up interest rates.

  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

    Economic growth is usually brought about by technological innovation and positive external forces. There are two main ways of measuring economic growth. The first way is GDP and the second is GNI. In the short term, economic growth is caused by an increase in aggregate demand.

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