if the economy is already near full employment (at Yf)‚ with only a small output gap‚ any increase in AD will result in price inflation‚ but little increase in output. With a small output gap and an inelastic Aggregate Supply curve the inflationary effects of a sustained increase in Aggregate Demand will be considerable. This increase in AD clearly poses an economic problem‚ as the economy cannot cope with the extra demand. However‚ Classical economists would argue that the macro-economy
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1. GENESIS OF ‘THE GOAL’ The Goal is about science and education. The author believes that these two words have been abused to the extent that their original meanings have been lost in a fog of too much respect and mystery. Science for him is not about the secrets of nature or even about truths. Science is simply the method to try and postulate a minimum set of assumptions that can explain‚ through a straightforward logical derivation‚ the existence of many phenomena of nature. For example the
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customers | Cash Collections | Process payments from customers | PBL Session 2 Question b: In expenditure cycle‚ the four activities conducted are ordering materials‚ supplies‚ and services‚ receiving materials‚ supplies‚ and services‚ processing invoices and cash disbursements. The table below shows the activities and the related actions to be conducted by company employees:- Expenditure cycle activities | Activity | Ordering Materials‚ Supplies‚ and Services | Send orders to supplier
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1. Suppose during 2012 there is a sudden unanticipated burst of inflation. Consider the situations faced by the following individuals—who gains and who loses? a. A homeowner whose wages will keep pace with inflation during the year‚ but whose monthly mortgage payments will remain fixed. This person has gained. Nominal income is income that you receive in a given time period and it is measured in current dollars. Real income is nominal income adjusted for inflation and is the purchasing power
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producers‚ but to the economy as whole‚ if the prices for coffee are unstable‚ for some countries this could have a huge impact on the inflation levels. The diagram below describes how an unstable price for coffee can increase and affect the short run aggregate supply and cause the general price level for the economy to rise and therefore causing inflation as they did in July 2012 (Ycharts. (2013) There are
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1. Demand-Pull Inflation : The most important inflation is called demand-pull or excess demand inflation. Demand-pull Inflation arises due to various factors like rising income‚ exploding population‚ etc.‚ leads to aggregate demand and exceeds aggregate supply‚ and tends to raise prices of goods and services. This is known as Demand-Pull or Excess Demand Inflation. 2. Cost-Push Inflation : When prices rise due to growing cost of production of goods and services‚ it is known as Cost-Push (Supply-side)
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4 382 5 410 6 432 7 380 8 410 FCT 4 Most forecasting techniques assume that there is some underlying stability in the system. (a) True (b) False PROBLEMS ON AGGREGATE PRODUCTION PLANNING Washington Laundry Products‚ Inc.‚ makes commercial and industrial laundry machines (the kinds hotels use)‚ and has these aggregate demand requirements for the next six months. The firm has regular capacity for 120 units‚ and overtime capacity for 40 more. Currently‚ subcontracting can supply up to 100
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alternative for replacing fine aggregates. Coal Bottom Ash has physical characteristics are same as that of naturally found sand which makes it suitable for replacing sand in concrete. Coal Bottom Ash represents good pozzolanic element reactivity when it comes in contact with finer elements. Many researchers in their research work claimed that the properties of Self-Compacting Concrete comprised of 10% replacement of Coal Bottom Ash as a supplementary material of fine aggregate shows a great performance
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BBC News: UK unemployment rises to 2.56 million (17/4/13) UK unemployment rose by 70‚000 to 2.56 million between December and February‚ the Office for National Statistics (ONS) has said. It pushed the unemployment rate to 7.9%‚ raising further questions about the UK’s economic strength. The number of people in employment also fell‚ while earnings growth slowed considerably‚ according to ONS data. But there was positive news on the number claiming Jobseeker’s Allowance last month‚ down 7
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Describe the short-run determination of equilibrium GDP and the price level in the classical model Explain the circumstances under which the short-run aggregate supply curve may be either horizontal or upward-sloping Learning Objectives Understand what factors cause shifts in the short-run and long-run aggregate supply curves Evaluate the effects of aggregate demand and supply shocks on equilibrium real output in the short run Determine the causes of short-run variations in the inflation rate Slide
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