foreign exchange reserve‚ etc. Flow: quantity expressed for a period of time. Eg: GDP‚ inflation‚ exports‚ consumption‚ etc. Aggregate Demand and Aggregate Supply Aggregate Demand: sum of demands for all consumer goods and services and for capital goods – Sum of consumption‚ investment‚ government expenditure and net export. Aggregate Supply: sum of the supplies of all consumer goods and services and of capital goods – The amount of output the economy can produce given
Free Gross domestic product Economics Income
Macroeconomic study of deal not with individual but aggregate of these quantities not with individual incomes but nation incomes not with individual output but with the nation output Macroeconomic as two policies which are; Financial or monetary macroeconomic policies: The government can make the balance of how money can be supply. The money can be supply in three term which are: OMO- Open Market Operation Reserve requirement Interest Rate OMO can supply money into the bank through
Premium Inflation Economics Monetary policy
mechanism The change in the money supply affects interest rates Interest rates affect investment spending Investment spending is a component of aggregate spending (output) Reduced-Form Examines whether one variable has an effect on another by looking directly at the relationship between the two Analyzes the effect of changes in money supply on aggregate output (spending) to see if there is a high correlation Does not describe the specific path M ? Y
Premium Inflation Monetary policy
Chapter 10: Savings‚ Investment Spending and the Financial System 1. Given the following information about the closed economy of Brittania‚ what is the level of investment spending and private savings‚ and what is the budget balance? What is the relationship among the three? Is national savings equal to investment spending? There are no government transfers. GDP= $1‚000 million T= $50 million C= $850 million G= $100 million Investment spending is $50 million. The budget balance is
Premium Macroeconomics Economics Consumption
Economics for Business Decisions Syllabus of the chapter: (B) Macro Economics (1)Fiscal Policy: Basic Economics Indices (National Income‚ National Production‚ National Employment‚ General prices level). Aggregate Demand (Consumptions‚ Government Expenditure & Business investment). Aggregate Supply. Determination of Income (or production). Taxation & Fiscal policy. A Note for MFA (I semester) Students:-The words underlined above are the portions completed till date in the class and are the portions
Premium Macroeconomics Economics Tax
1930s‚ if they are similar‚ how do we prepare to do to prevent; if do not‚ how do we make it go smoothly. Economic theory: Fiscal policy is the use of government taxation and expanding to influence variable of economy which including: * Aggregate demand and the level of economic activity * The pattern of resource allocation * The distribution of income Monetary policy is processed by which the national central bank of a country control the money supply‚ the policy often target
Premium Inflation Keynesian economics Recession
(sewers‚ canals‚ roads‚ tunnels etc) and separated by spaces in between (parks‚ woods‚ playing fields‚ landscaped areas‚ squares etc)”. (Danny Myers‚ 2006‚ pg6) AGGREGATE DEMAND: “All planned expenditures for the entire economy summed together.” (Danny Myers‚ 2006‚ pg123) • By influencing Government taxation and expenditure‚ aggregate demand can be stimulated to achieve Macroeconomic objectives such as; price stability‚ full employment and economic growth. • It is the total demand for goods and
Premium Tax Public finance
chapter looks briefly at the legislative mandates given to government to pursue stabilization of the economy; it then explores the tools of government stabilization policy in terms of the aggregate demand-aggregate (AD-AS) model. Next‚ some fiscal policy measures that automatically adjust government expenditures and tax revenues when the economy moves through the business cycle phases are examined. Finally‚ problems‚ criticism‚ and complications of government’s fiscal policy are addressed.
Free Tax Public finance Progressive tax
examples Kenya’s budget making process. A budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving‚ borrowing and spending. In summary‚ the purpose of budgeting is to: • Provide a forecast of revenues and expenditures‚ that is‚ construct a model of how our business might perform financially if certain strategies‚ events and plans are carried out. • Enable the actual financial operation of the business to be measured against the forecast. • Establish the cost
Premium Government Resource allocation Budget
income is the total value of goods and services produced in a country in any given year. Government expenditure (G) is the amount of money the public sector spends on public goods and services‚ such as maintaining public schools‚ as well as public investment expenditure‚ such as building of public infrastructure. An increase in government expenditure will cause a direct increase in the aggregate expenditure (AE) of the economy. This will increase the national income of the economy via a multiplier (k)
Premium Economics Inflation Gross domestic product