Contraction‚ Recession‚ Downswing or Depression. Definition of Trade Cycle According to Keynes‚ "A trade cycle is composed of periods of Good Trade‚ characterized by rising prices and low unemployment percentages‚ shifting with periods of bad trade characterized by falling prices and high unemployment percentages." Features of Trade Cycle The characteristics or features of trade cycle are :- 1. Movement in Economic Activity : A trade cycle is a wave-like movement in economic activity
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demand available in the economy to generate full-employment equilibrium. In other words there is not enough being bought to provide jobs for everyone who wants them. Full employment level of national income means the level of output attained when unemployment is at a socially acceptable level. In most cases this is around 5% however it tends to
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Domestic output may be at its capacity Inflation may be high. High level of effective demand. Rising interest rates Level of business activity RECESSION H T OW D R G N E R T Time √ Contraction or recession phase: Real output is decreasing Unemployment rate is rising. As contraction continues‚ inflation pressure fades. If the recession is prolonged‚ price may decline (deflation) The government determinant for a recession is two consecutive quarters of declining output. Level of business activity
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cyclical unemployment? A. falling levels of consumer confidence B. rising levels of government expenditure C. rising levels of finance costs D. falling levels of business confidence Question 2 All of the following are forms of natural unemployment‚ except: A. structural. B. frictional. C. seasonal. D. cyclical. Question 3 Unemployment that is caused by industry growing and shrinking is called: A. hidden unemployment. B. frictional unemployment.
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Essay Outline the causes of both unemployment and inflation. Explain policies available to the government to combat these two economic issues. Unemployment and inflation have many different causes and the levels of have had severe fluctuations over time. Unemployment and Inflation can be caused by many different things but normally they follow the business cycle with high inflation in times of boom and high unemployment in times of recession. The government can use two different policies to
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which a decrease in taxes‚ and/or an increase in transfer payments are used to correct the problems of a business-cycle contraction. The goal of expansionary fiscal policy is to close a recessionary gap‚ stimulate the economy‚ and decrease the unemployment rate. I will now evaluate the view that expansionary Fiscal Policy is always beneficial to the UK’s macro-economic performance. One way expansionary fiscal policy can be beneficial to the UK’s macro-economic performance is that it can lower taxes
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BUECO5903 BUSINESS ECONOMICS ASSIGNMENTS A and B Semester 1‚ 2013 Due dates for each section are provided in the Course Description. Part B – Macroeconomics – Worth 10% of total assessment: Answer any five (5) of the following questions. Each question is worth 10 marks. Question 10: a) Which of the following are final goods and services and which are intermediate goods and services? Please explain why in your answer. (4 marks – 1 mark each) i) A windscreen purchased by
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competition c. Southwest Airlines – Oligopoly d. large farm whose major crop is corn – Oligopoly e. Google – Monopolistic competition Q2. (a) How does the government measure the nation’s unemployment rate? The Government uses monetary and fiscal policy to fight unemployment‚ increase spending‚ and
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Business Fundamentals (BUS3702) Lecture 3 _________________________________________________________________________________ LECTURE 3 Lecture Title: PEST Analysis Lecture Intended Learning Outcomes On completion of the lecture‚ students are expected to be able to: comprehend the importance of PEST analysis examine how firms can use PEST (political/legal‚ economic‚ social and technological influences) analysis as part of its business strategy Lecture Content A. PEST Analysis The
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the bank. 7) A recession occurs when real GDP declines. ( T ) 8) If the MPC for the economy is 0.8‚ the tax multiplier is 3.5. ( F ) * 1/1-MPC ‚ 5 9) Rapid increases in the price level during periods of recession or high unemployment are known as inflation. ( F ) * Stagflation 10) The larger the MPC‚ the smaller the government spending multiplier. ( F ) * Level 2 1) A progressive income tax means that those with a higher income pay (a) A lower
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