NAME: Firdausi Ali COURSE: NCUK/IFY MODULE: Economics (coursework 2) DATE GIVEN: 10th February‚ 2013 DATE TO BE SUBMITTED: 02nd March‚ 2013 TUTOR: Mr. Lawal G. and Mr. Adedeji QUESTION Keynesian solution to unemployment was higher public spending which through the multiplier process would generate income and more jobs. Explain how this solution works and are there other solutions to the problem of unemployment? INTRODUCTION The world is facing a serious problem of
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using algebra. Firstly we take into consideration how the goods and services of aggregate expenditure are shown. Aggregate expenditure: AE = C+ I + G Consumption Function: C = a + bYd Accounting identity: Yd = Y – T Taxation function: T = T0 + tY Investment function: I = I0 – hR Government exp. Function: G = G0 We then take into account that in equilibrium‚ aggregate supply (Y) is equal to aggregate expenditure (AE). Y = AE Therefore: Y = C + I + G Y = (a + bYd) + (I0 – hR) + G0
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of GDP denoted by Y* (full employment)‚ illustrated in Figure 1. The initial equilibrium is characterised by an equivalency between planned aggregate expenditure‚ PAE‚ and output‚ Y; and between planned injections‚ J P ‚ and withdrawals‚ W. The initial equilibrium is consistent with points A and A’ on‚ respectively‚ the initial planned aggregate expenditure schedule‚ PAE0‚ and the withdrawals schedule‚ W0 (Bernanke et. al. 2008‚ 209). At this level of income‚ there will be no unplanned change to
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fulfilled these objectives‚ it will function at optimum efficiency. In order to attain or equilibrate an efficient economy‚ supply side and demand side policies can be used. Supply side policies are those policies that affect the aggregate supply of the economy. The aggregate supply the They are implemented in order to increase the amount of ’supply’ that is capable of being produced over the long term. They improve the productive potential of the economy. Supply side policies are generally categorized
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perspective‚ the federal budget is a tool that can shift aggregate demand and thereby alter macroeconomic outcomes. Although fiscal policy can be used to pursue any of the economic goals‚ we need to explore its potential to ensure full employment and observe the impact on inflation. The mix of output and distribution of income will determine the potential of fiscal policy. The objective of fiscal policy is not always to increase aggregate demand. At times‚ the economy is already expanding too
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Introductory Concepts Short-Run Model: DD and AA Liquidity Trap Macro Policy and CA Slides for International Finance Aggregate Demand and the SR (KOM Chapter 17) Alan G. Isaac American University 2012-10-22 Alan G. Isaac Slides for International Finance Introductory Concepts Short-Run Model: DD and AA Liquidity Trap Macro Policy and CA AA Curve Aggregate Demand PREVIEW AA Curve review SR model of asset market equilibrium AA: Y E (to maintain asset mkt eq) DD Curve
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Fiscal policy is the use of government expenditure and revenue in order to influence the economy and fund public goods and services. Fiscal policy is the main instrument government uses in order to try and create economic growth. However its actual effectiveness at meeting this objective is arguably not that good for a number of reasons which will be discussed in this essay. The main part of fiscal policy in order to increase growth is expansionary fiscal policy. This is where the government is
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individual industries and individual commodities. Macroeconomics is concerned with the nature‚ relationships and behaviour of such aggregate quantities and averages as national income‚ total consumption‚ savings and investment‚ total employment‚ general price level‚ aggregate expenditure and aggregate supply of goods and services. As macroeconomics deals with aggregate quantities of the economy as a whole‚ it is also called as aggregative economics. 1.1.2 Subject matter :Microeconomics seeks to explain
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economic state includes an observation of the proprietorship of policy interventions. Economic Factors and the Impact on Aggregate
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personal life. The word statistics has several meanings. In the first place‚ it is a plural noun which describes a collection of numerical data such as employment statistics‚ accident statistics‚ population statistics‚ birth and death‚ income and expenditure‚ of exports and imports etc. It is in this sense that the word ’statistics’ is used by a layman or a newspaper. Secondly the word statistics as a singular noun‚ is used to describe a branch of applied mathematics‚ whose purpose is to provide
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