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University Degree: Macroeconomics
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Macroeconomics then deals with the economy as whole rather than individual activities; it deals with the economic aggregates such as the level of output, prices and unemployment in the economy. The UK stable economic environment can be affected or stimulated by fluctuations in the economic activities and macroeconomic variables such as economic growth, unemployment, inflation and the balance of payment at unacceptable levels. Macroeconomic problems Economic growth, inflation, unemployment and the balance of payment are macroeconomic problems that the UK encounters both past and present leading to macroeconomic objectives by the government.
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and low taxes and overheads. Organised Retailing Organized retailing comprises mainly of modern retailing with busy shopping malls, multi storied malls and huge complexes that offer a large variety of products in terms of quality, value for money and makes shopping a memorable experience. Retailing Scenario in India Most of the retail sector in India is unorganised, which were known as mom-pop stores. The biggest advantage in this sector is the consumer familiarity that passes on from one generation to the next. The transformation stage of the retail sector started in late 1990's.
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The territory has an area of 796,095 square kilometers. The capital of Pakistan is Islamabad. Pakistan was brought into being at the time of the partition of British India in1947 in order to create a separate homeland for India's Muslims in response to the demands of Islamic nationalists, demands that were articulated by the All India Muslim League under the leadership of Mohammad Ali Jinnah. From independence in 1947 until 1971, Pakistan (both de facto and in law) consisted of two regions: West Pakistan, in the Indus River basin; and East Pakistan, located more than 1,600 kilometers away in the Ganges River delta.
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and business investments by foreign companies in Vietnam � Government ownership � Government price controls and allocation of resources � Other fators deemed appropriate. And hereby is the reasons for Vietnam's designation as a NME according to Ministry of Commerce of The United States. It said that Vietnam's economy is still on the way to reform and has not really met the criteria for a market economy due to the antidumping law with the following expressions: � Firstly, Vietnam's local currency or VND is not completely freely convertable in the capital market.
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are �800,000 labour costs per unit (e) are �100 and raw material costs per unit (f) are �258. They also spend �40,000 (V) per period on advertising and are capable of producing up to 1,000 units in each period. The total cost function is expressed as; TC = d + eQ + fQ + V The demand function is as follows; P = a - bQ + c?V Where a = 4,000, b = 3 and c = 3 This report is therefore prepared for top management, as the company has requested that we assist in evaluating the following potential strategies, using their current profit potential as your benchmark; 1.
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The economic implications for countries dealing with trade deficits are that when a country's imports are in excess of exports it would suggest that there is a negative demand for that country's goods and services from abroad. Reduction in foreign demand would cause the aggregate demand to come down as it has the same implications on the economy as a reduction in one of the other three components of aggregate demand. So as a result, this will bring down the country's output and thus the producers will only need fewer workers, causing a decrease in the level of workforce employed which would eventually create unemployment.
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Using IS/LM model, discuss the extent to which price flexibility can return and economy to full employment. Explain how the analysis can help account for Japan's recent slump.
Real money balances can be changed because of flexibility of prices. The Classicals believe that money is neutral and even if there is a reduction or an increase in the supply of money, the price level is changed but there is no effect on variables such as employment, output and real interest rate (Abel. 2001). From a Classical point of view, in the short and long-run, prices is fixed so therefore, the supply of real money balances can be changed by price flexibility, i.e. an increase in the level of money supply increases price level.
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So by increasing the level of capital per capita, you are very likely to see an increase in output. Whereas, giving an extra unit of capital to a person in a rich country, you would experience diminishing returns. Poorer countries are yet to experience diminishing returns. As countries save and accumulate capital, the additional unit of capital gives them a higher amount of output, but at a decreasing rate. Some rich countries go beyond the steady state level at which deprecation is more than savings, bringing them back to the steady state. 3. True An economy's aim is to have a steady growth rate.
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The bank added another quarter of a percentage point to the rate on October 19 and made it clear that as the economy continued to improve, there was only one way - rates could go up. However, Canadian dollar started to rise rapidly and growth slowed in the second half of 2004 and that got the attention of the Bank of Canada. It held off on further rate increases - until September 7, 2005, when the rate went up another quarter of a percentage point to 2.75 per cent.
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From the introduction of the minimum wage there appeared to be a large increase of women in the work force. The minimum wage allowed single mothers; married women with children etc to get part-time jobs and get paid a fair amount for the hours of work they have performed there for allowing them to earn an income for their household as well as taking care of other responsibilities i.e. children. 'Some 1.3 million workers benefit from the minimum wage. The main beneficiaries have been women, the majority of whom work part-time and many of whom are lone parents' (Sloman, J)
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The public institutions hoping to move upwards on the prestige scale are finding it difficult, as funding remains variable. This is because it is impossible for the government to fund an indefinite number of research universities. British universities are becoming increasingly americanised, although government constraints are stronger. Quality must be maintained as their staff ratios deteriorate, due to salary differentials across subject areas. Tuition fees were once seen to be a violation of the sacred principle by vice-chancellors. However this was based on the view that there would be less people entering university.
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Since 1997 the Bank of England has been given operational responsibility for monetary policy. The current target for inflation set by the government using the CPI measure is 2%, although it is allowed to deviate 1% either way of the central target. Higher interest rates will reduce inflation because they reduce consumption and investment. This is because the opportunity cost of saving has increased so consumers would be more inclined to save, and less inclined to borrow. Investment would decrease because it becomes more expensive for firms to borrow money for capital unless they reduce their profit margins, which is unlikely, so investment would decrease.
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"It was a supply-side shock, not deflationary monetary and fiscal policies, which initiated depression in 1920 and contributed to the subsequent slump". Discuss.
Supply side theory Aggregate supply shows the interaction between price level and output in the economy. The aggregate supply relation is typified by the equation: P = Pe(1+()F(1 - Y/L,z) Where P is the price level, Pe is the expected price level, ( is the mark-up a producer charges, Y/L represents labour productivity and z is a "catchall" variable that encompasses all other factors that may affect wage determination such as trade union power, unemployment benefits or a minimum wage. This equation is given by the combination of the wage (1) and price (2) determinants within the economy (1)
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The development of each indicator and its impact will be analyzed in later sections. To fully comprehend the development of Slovak indicators, we need to investigate Slovak economic situation prior to the independence. After the fall of communism in 1989, former Czechoslovakia (Slovakia being less developed part of Federation) was considered as one of the most economically advanced countries among central and eastern European countries. Slovak transformation to free market economy founded upon free firms and industry has been difficult. There was couple of problems Slovakia faced. Slovak manufacturing industry was inefficient and old due to old industrialization, which was during communism; therefore products could not compete in the world market.
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Discuss the limitations in the use of index data in producing Williamson and Lindert?s results. Comment in reflection on Crafts and Flinn?s criticism.
The article by Peter Lindert and Jeffrey Williamson 'English Workers' Living Standards During the Industrial Revolution: A New Look' provides new evidence to the standard of living debate in an attempt to offer a clearer representation on workers prosperity after 1750. New wage data and new employment weights make it possible to assess nominal earnings growth from 1755 to1851 for a number of labouring classes: farm labourers, urban workers, white collar and blue-collar workers. New cost of living data, increased by rents make it possible to assess real earnings growth.
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Some researches suggest that there is a positive correlation between monetary incentive and employees' performance. The research conducted by Stajkovic and Luthans (2001) shows that systematic monetary incentive
states the correlation between money and performance is not strong. Using money to incentive employees has some problems. Firstly, money does not have a "staying power". Employees will forget this reward in two weeks. Furthermore, financial rewards cost companies a lot of money. Maintaining the same impact on employees requires increasing monetary rewards. Spitzer (1996) even argues that there is no correlation between money and high quality performance. Money only can increase the quantity of performance at simple tasks. Cieri and Kramar (2003, p.475) claim "most jobs have no physical output". Therefore, whether the performance of employees' is good or not can not only be scaled by the quantity of output. What do researches say about monetary incentive?
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These could be any of the following: the location within the UK; type of neighbourhood, be it council flats, mansions or retirement homes; the floors size; central heating, garage, number of bedrooms, and number of bathrooms that are available; finally whether it is leasehold or free hold; which is also supported by John M Clap & Alan E Gelfand. ' in addition, neighborhood amenities (and disamenities) can cause house prices to change rapidly over relatively short periods.' 3 A simple example of this would be to compare houses located in London.
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If output can be clearly measured, piece rates are considered simpler and more efficient than time wages. While employers need to monitor for quality control when piece rates are used, it is generally believed that employers do not need to monitor effort or screen workers since workers are paid only for what they produce1. By improving incentives, piece rates may increase income for those who decide to work at piece rate, while simultaneously reducing employer unit labour costs. Since pay is dependent on what is actually produced rather than on time spent - implying greater income uncertainty - workers are thought to require a small increase in the average expected pay per time spent when working at piece rate instead of at a time wage.2 Paying on the basis of output has advantages.
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Furthermore, NCM states that high rate of employment are not evidence of any gap between actual output and potential output that can be reduced through stabilisation policy, any excess unemployment which exists is assumed to be essentially voluntary- workers have the option of accepting low wages to obtain jobs. New Keynesian macroeconomists don't believe that markets clear continuously because of the existence of imperfect competition and menu costs, prices tend to be sticky and adjust slowly to changing economic conditions.
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World financialsystems have changed and now monetary transmission mechanisms have otherdistributional effects that are not addressed within the traditional moneyview. Firstly, I shall explain the distributional aspects of the traditionalmoney view ...
Three conditions are necessary for the money channel to work. First, banks can not perfectly shield transaction balances from changes in reserves. Second, there is no close substitute for money in the conduct of transactions in the economy. Thirdly, it makes no difference which type of assets banks hold. Fig.2 shows the transmission through the major channels. The traditional view however has inefficiencies. Firstly, in the IS-LM analysis, the bond market is assumed to be in equilibrium. Banks have a primary role of providing capital for businesses but the model totally ignores the banks involvement in the economy.
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'The Most Significant Outcome Of The New Economic Model In Latin America Is A Rise In Poverty And Inequality'. Discuss. The New Economic Model (NEM) was a system that was put into action following the 1982 debt crisis
The debt crisis The NEM was implemented as a retort to the debt crisis. The debt crisis occurred and Latin America had to sort itself out quickly, in order to avert a total economic collapse. They needed to adopt different tactics to save and make money and use alternative methods. The 1974 oil shock was something of a precursor to the 1982 debt crisis. Exporters of oil laid down their monies in the commercial banks of developed nations, but in 1974 when oil prices rocketed causing a recession in many of these countries, the demand on credit noticeably decreased. "Left with excessive liquidity, bankers eagerly lent to the third world" (Cardoso & Helwege. 1997.
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The money supply can be defined as notes and coins circulating outside the central bank. It is designed to control the amount of money flowing around the economy. The money supply is controlled by the Fed through its monetary policy stabilise the business cycle. As the nation's central bank, the Fed determines the total amount of money circulating around the economy. In principle, the Fed can use three different 'tools'--open market operations, the discount rate, and reserve requirements to manipulate the money supply.
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It is said that unemployed face high marginal tax rates and other disincentives to working. Discuss.
The fact that the unemployment rate in Australia is stubbornly stuck around 6% is best explained through the theory that unemployment has an equilibrium, or natural, rate (Friedman and Phelps, 1968). The natural rate is defined as the unemployment rate where there is neither excess demand nor supply in the overall labour market, and as the unemployment rate that will occur in the long run if the actual and expected rates of inflation are equal (McConnell, Brue and Macpherson, 2003).
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"A crucial element for the stability of the EMS is the perception on the part of the financial markets that the authorities are strongly committed to defending their exchange rates" Discuss.
But the defining event was the Werner Report of 1970, delivered by the Luxembourg Prime Minister. This Report was the first attempt to talk about monetary union, and concluded that it could be a reality by 1980. Although this date was missed by almost 20 years, the Report had no rigid timetable. The 3 stages set out were I) the voluntary reductions of fluctuation margins between the currencies of Member States 11) total liberalisation of the flow of capital, and iii) the irrevocable fixing of the exchange rates between different currencies. The 1971 Smithsonian Agreement was an attempt to salvage Bretton Woods; each currency was allowed to fluctuate 2.25% either side of the existing $US exchange boundaries - giving EC currencies an effective margin of 9% - at the time, such a boundary was ineffective.
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"Entry into Monetary Union would have little appreciable effect on monetary policy in the UK" Critically discuss.
This was due to both the difficulty of the method (i.e. it is hard to define the velocity of money) and the credibility of the government of achieving lower inflation. When the Government is in charge of obtaining low inflation it is not always credible, this is due to the preferences of a Government. The best way to show this is as a simple game. We will assume that the Government chooses inflation and the private sector obviously set the expected rate of inflation.
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