Economic Real World
Table of Contents
1.0 Introduction 1
2.0 Question A: 2
2.1 Monetary Policy 2
2.1.1 Real World Example : Pakistan 3
2.2 Fiscal policy 3
2.2.1 Real World Example: Fiscal spending stepped up to prevent deep recession in Malaysia 4
3.0 Question B: 6
3.1 Demand-Pull Inflation 6
3.1.1 Real World Example 6
3.2 Cost-Push Inflation 7
3.2.1 Real World Example 7
4.0 Conclusion 9
5.0 References 10
5.1 Books 10
5.2 Online Journals 10
5.3 Online Article 10
5.4 Online Sources 10
6.0 Appendix 11
1.0 Introduction
On the assignment give, we need to explain with the examples what are the government policies been helpful or harmful in contributing to faster economic growth in developing countries. We also need to list and explain the types of inflations and provide 2 common inflations happen in Malaysia with relevant examples.
2.0 Question A: To what extent have government policies been helpful or harmful in contributing to faster economic growth in developing countries during recent year? Discuss with reference to specific examples.
2.1 Monetary Policy The fundamental objective of monetary policy is to assist the economy in achieving a full employment, noninflationary level of total output. Monetary policy consists of altering the economy’s money supply to stabilize aggregate output, employment, and the price level. (McConnell.C,1993)
It is impossible to use monetary policy as a precise mean of controlling aggregate demand. It is especially weak when it is pulling against the expectation of firms and consumers, and when it is implemented too late. However, if the authorities operate a tight monetary policy firmly enough, they should eventually be able to reduce leading and aggregate demand. But there will inevitably be time lags and imprecision in the process. An expansionary monetary policy is even less reliable. If the economy is in recession, no matter how low interest rates are driven, people cannot
1.0 Introduction 1
2.0 Question A: 2
2.1 Monetary Policy 2
2.1.1 Real World Example : Pakistan 3
2.2 Fiscal policy 3
2.2.1 Real World Example: Fiscal spending stepped up to prevent deep recession in Malaysia 4
3.0 Question B: 6
3.1 Demand-Pull Inflation 6
3.1.1 Real World Example 6
3.2 Cost-Push Inflation 7
3.2.1 Real World Example 7
4.0 Conclusion 9
5.0 References 10
5.1 Books 10
5.2 Online Journals 10
5.3 Online Article 10
5.4 Online Sources 10
6.0 Appendix 11
1.0 Introduction
On the assignment give, we need to explain with the examples what are the government policies been helpful or harmful in contributing to faster economic growth in developing countries. We also need to list and explain the types of inflations and provide 2 common inflations happen in Malaysia with relevant examples.
2.0 Question A: To what extent have government policies been helpful or harmful in contributing to faster economic growth in developing countries during recent year? Discuss with reference to specific examples.
2.1 Monetary Policy The fundamental objective of monetary policy is to assist the economy in achieving a full employment, noninflationary level of total output. Monetary policy consists of altering the economy’s money supply to stabilize aggregate output, employment, and the price level. (McConnell.C,1993)
It is impossible to use monetary policy as a precise mean of controlling aggregate demand. It is especially weak when it is pulling against the expectation of firms and consumers, and when it is implemented too late. However, if the authorities operate a tight monetary policy firmly enough, they should eventually be able to reduce leading and aggregate demand. But there will inevitably be time lags and imprecision in the process. An expansionary monetary policy is even less reliable. If the economy is in recession, no matter how low interest rates are driven, people cannot
References: 2. Robert. J Gordon, (2006), Macroeconomics, 10th ed, Pearson International 3 4. Gordon.R.J, (1983), Macroeconomics, 4th, Published stimultaneously in Canada 5 6. Parkin M, Matthews K., (2003), Economics, 5th ed, Addison-Wesley 7 8. Sloman J, Wride A., (2009), Economics, 7th ed, Prentice Hall 9