The study of money, capital, banking, wealth, production and consumption of goods, science of choice and the analysis of movement in the overall economy- trends in output, prices and unemployment is called economics. Economics is further divided into two main parts- micro and macroeconomics , where “macro” means big and “micro” small. A major distinction is made between macroeconomics, which studies the economy as a whole- such as national income, gross domestic product (GDP), overall inflation and unemployment rates, balance of payment and exchange rate and so on – and also it examines economic relations of a country with the rest of the world. In other words, macroeconomics takes a much wider view by analysing performance of the economic
Composition of output: defense goods or capital goods that do not benefit the consumers. This may not raise the living standard of the people with a higher GDP. The balance between investment and consumption: if a lot of sources are provided to the consumers in short run needs, there will be insufficient resources which will be needed in the long run. There might be an improvement in the living standard of people but lead to over exploitation of resources. Leisure time: The GDP also does not involve the leisure time or event the hard work given in by people for producing the output.
Tools that Control Money Supply The Federal Reserve use several tools like discount rate, federal funds rate, required reserve ratio and open market operations to control the money supply. In the simulation, the effect of controlling the money supply on the economy was presented. Typically, releasing money into the system results in higher Real GDP and lower unemployment. On the other hand, it also raises inflation. Inflation and Real GDP work cross-purposes.
Government has to maintain not only a good economic system, but also a stable society. In an ideally perfect government there cannot be any differentiation in taxes, nor can there be such a great difference between upper class and lower class. In a capitalistic society there is differentiation in taxes and a wide gap between upper and lower class incomes. A good, successful government in my opinion cannot be ideally perfect. I would think that that could only happen if the government controls the people, like a communist country, but then that in the society’s point of view isn’t perfect either.
Tariffs are also good for domestic producers or local business cooperation’s. Imports or foreign cooperation’s will not import goods if a tariff in a specific nation is high. So it’s a great advantage for local cooperation because their product will be attractive. As consumers will just benefit from non-tariff trade b... ... middle of paper ... ...currency is because their currency is not valuables so that’s why they use foreign currency. If I take a Macedonia as an example it’s a very small country in Europe will they do trade with USA or Europe and which currency will they use.
Economics is defined as a social science concerned with making optimal choices under conditions of scarcity. As a subunit of economics, macroeconomics is concerned with the economy as a whole. It seeks to find an outline for the economy, measuring total output, total employment, total income, and other various economic problems. Aggregate output is used as the primary measure of the economy’s performance. Gross domestic product defines aggregate output as the value of goods and services produced annually.
Intel Corporation and the Effects of Economics Economics is defined as is the social science that studies the production, distribution, and consumption of goods and services. It primarily deals with the exchange of value and that labor or human effort is the source of all value. The field may be divided in other ways, most commonly microeconomics vs. macroeconomics. Microeconomics examines the economic behavior of individual units, including businesses and households, and their interactions through markets, given scarcity and government regulation. Macroeconomics examines an economy as a whole "top down" with a view to understanding interactions between the broadest aggregates such as national income and output, employment and inflation and broad aggregates like total consumption and investment spending.
There are two ways of calculating GDP: Nominal GDP and Real GDP. If the GDP is calculate at current price, it explains about nominal GDP. Real GDP is used to calculate at constant price or base year. There are some differences between nominal and real GDP. Unlike nominal GDP, real GDP can tell the actual economic growth of the country.
BUSINESS ECONOMICS ASSIGNMENT- 3 Ques. 1)(a)Analyse both the conventional and unconventional tools used by central banks. (a) Meaning of Monetary Policy:- Monetary policy refers to the measures which the central bank of the country takes in controlling the money and credit supply in the country with a view to achieving certain specific economic objectives. These objectives are: 1. Rapid Economic Growth: The monetary policy effects the economic development by controlling interest rates in the economy and its effect.
Introduction Macroeconomics studies the larger economy. It focuses on features such as national income, unemployment, inflation etc. National Income accounting is a system that governments use to measure the level of a country's economic activity in a given period. Simon Kuznets was a Nobel award winning economist who developed and extensively researched the economic growth of nations, developing methods for calculating the size of, and changes in, national income. These methods aid national governments as the data provided forms the basis of policy decisions.