Circular Flow of Income
|
|
- Isaac Gallagher
- 6 years ago
- Views:
Transcription
1 Business Environment 2 Week 2 Circular Flow of Income 1
2 Learning Objectives To understand the concepts of circular flow of income To bring out the relationship between the four macroeconomic objectives and the circular flow of income To know how aggregate demand affects the macroeconomic objectives 2
3 Macroeconomics and microeconomics Macroeconomic theory: It deals with the aggregate behavior of the economy as a whole. It studies the problems of determination of the level of national income, prices and the rate of interest. It tries to explain why there are changes in the level of national income and what accounts for economic growth. 3
4 Macroeconomics and microeconomics Microeconomic Theory: The microeconomic theory, on the other hand, deals with the behavior of individual markets of different goods and services. It explains the behavior of household, firm and industry taking part in the particular markets of a particular commodity. While explaining such particular markets, it deals with the question of how the resources are allocated among different branches of the economy and how income is distributed among different factors of production. 4
5 Major Macroeconomic issues Economic growth: A growing economy means that there will be more goods and services for people to consume. Inflation: By inflation we mean a general rise in prices throughout the economy. Unemployment The balance of payments and exchange rate: The final issue has to do with the country s foreign trade and its economic relationships with other countries. 5
6 Government Macroeconomic Policy High and stable economic growth Low unemployment Low inflation The avoidance of balance of payments deficits and excessive exchange rate fluctuations 6
7 Aggregate Demand (AD) Aggregate Demand (AD) is the total level of spending on goods and services in the economy. 7
8 Aggregate Demand (AD) Aggregate Demand controls four elements: Consumer spending on domestically produced goods and services (C d ), Investment by firms (I), Government spending (G), and The expenditure of foreigners on the subject country s export (X); less any expenditure on foreign goods and services (M). Therefore, AD = C+I+G+X-M. 8
9 Economic Sectors The economy is divided into 4 Sectors: 1. Households 2. Firms 3. Government 4. Foreign sector 9
10 1. Households Households: Households consist of consumers. They provide the factors of production, or resources used in production. What are the factors of production? (Land, labour & capital) 10
11 2. Firms Firms: This sector consists of the organizations (companies) that produce goods and services 11
12 3. Government Government: It is also known as the public sector. It consists of the economic activities of government. 12
13 4. Foreign Sector Foreign Sector: This comprises the economic activities of people outside the domestic economy 13
14 Circular Flow of Income How to analyze the interaction of the 4 economic sectors? The usual way of analyzing the interaction of these sectors is a model known as the circular flow of income 14
15 Circular Flow of Income The modern economy is a monetary economy. In the modern economy, money is used in the process of exchange. Money has facilitated the process of exchange and has removed the difficulties of the barter system. Thus, money acts as a medium of exchange. The households supply the economic resources or factors to the productive firms and receive in return the payments in terms of money. It is thus clear that, in the monetary economy, there will be flows of money corresponding to the flows of economic resources and the flows of goods and services. But each money flow is in opposite direction to the real flow. 15
16 Circular Income Flow in a Two Sectors Economy Fig
17 Circular Income Flow in a Two Sectors Economy In Fig.., in the upper loop of this figure, the resources such as land, capital and entrepreneurial ability flow from households to business firms as indicated by the arrow mark. In opposite direction to this, money flows from business firms to the households as factor payments such as wages, rent, interest and profits. In the lower part of the figure, money flows from households to firms as consumption expenditure made by the households on the goods and services produced by the firms, while the flow of goods and services is in opposite direction from business firms to households. Thus there is, in fact, a circular flow of money or income. 17
18 Circular Flow of Income Fig.2.2 The circular flow of income INJECTIONS Factor payments Consumption of domestically produced goods and services (C d ) Investment (I) Export expenditure (X) Government expenditure (G) BANKS, etc GOV. ABROAD Net saving (S) Net taxes (T) Import expenditure (M) WITHDRAWALS 18
19 Circular Flow of Income On the left side, the firms pay to household money in terms of wages, salaries, and dividends from investments, interest, and rent. These are payments for factors of production (e.g. labour, capital, and land) which are supplied by the households. Money flows from firms to households as factor payments. On the right side, households pay money to firms as payment for domestically produced products and services consumed by households. Granting that households spend all their income and firms pay all its income they received from consumers; and if the speed at which the money circulates does not change, the movement will continue indefinitely unchanged in the inner flow. However, this does not happen in reality because there withdrawals and injections as indicated in the diagram. 19
20 Withdrawals & Injections Withdrawals (W) are incomes of households which do not pass through the inner flow (e.g. net savings [S], net taxes [T], export expenditures [M]). Thus, W=S+T+M Injections (J) are expenditures on the production of domestic firms coming from outside the inner flow (e.g. investments [I], government expenditures [G], export expenditures [X]). Thus, J=I+G+X 20
21 The components of withdrawals The households spend only part of the income received on the goods and services of domestic firms. The rest of the income will be withdrawn from the inner flow. There are 3 forms of withdrawals: 1. Net Savings (S) 2. Net Taxes (T) 3. Import expenditure (M) 21
22 The components of Injections Only part of the demand for firms output arises from consumer expenditure. The rest comes from other sources outside the inner flow. These additional components of aggregate demand are known as injections. They are: 1. Investment (I) 2. Government Expenditure (G) 3. Export Expenditure (X) 22
23 GDP (Total Output) Y = C + I + G + X M Y = Expenditure C = Total consumer expenditure (spending) I = Investment G = Government expenditure X = Exports M = Imports X M = Net exports 23
24 Circular flow and the 4 Macroeconomic Objectives What are the effects of aggregate demand on the four macroeconomic objectives: There will be economic growth. The greater the initial excess of injections over withdrawals, the bigger will be the rise in national income; Unemployment will fall as firms take on more workers to meet the extra demand for output; more people will be employed by the firms in order to meet aggregate demand. 24
25 Effects of Aggregate Demand Inflation tend to rise. The greater the rise in aggregate demand relative to the capacity of firms to produce, the more firms will find it difficult to meet the extra demand, and the more likely they will raise prices. Exports and imports as part of the balance of payments will tend to deteriorate. The high demand will invite more imports, and high domestic inflation will make exports less competitive, and domestic products will be more expensive than imported. As a result, import will tend to rise as export will tend to fall. Equals balance of payment deficit. 25
26 Injections > Withdrawals The ideal is Injections = Withdrawals But, what happens to the four objectives if planned injections exceed planned withdrawals? national income will rise unemployment will fall inflation will rise imports will rise export will fall 26
27 Injections < Withdrawals What happens if planned injections are less than the planned withdrawals? National income will fall. Unemployment will rise. Inflation will fall. Imports will fall. Export will rise. 27
OCR Economics A-level
OCR Economics A-level Macroeconomics Topic 2: Aggregate Demand and Aggregate Supply 2.1 Circular flow of income Notes The circular flow of income Firms and households interact and exchange resources in
More informationCIE Economics A-level
CIE Economics A-level Topic 4: The Macroeconomy e) The circular flow of income Notes Closed and open economies A closed economy is entirely self-sufficient, so it has no need to import anything, and it
More informationMacro Economics Aggregates and Concepts
Macro Economics Aggregates and Concepts 1 Introduction to MacroEconomics Introduction Economics is divided into two parts (1) Microeconomics examines the behavior of individual decision-making units business
More informationPAPER No. : 4 Basic Macroeconomics MODULE No. : 2- Circular Flow of Income and Expenditure
Subject Paper No and Title Module No and Title Module Tag 4, Basic Macroeconomics 2, Circular Flow of Income and Expenditure ECO_P4_M2 TABLE OF CONTENTS 1. Learning Outcomes 2. Introduction 3. The Four
More informationIB Economics The Level of Overall Economic Activity 2.1: Economic Activity
IB Economics: www.ibdeconomics.com 2.1 ECONOMIC ACTIVITY: STUDENT LEARNING ACTIVITY Answer the questions that follow. 1. DEFINITIONS Define the following terms: Income Factors of production Land entrepreneurship).
More informationChapter 12: Gross Domestic Product and Growth Section 3
Chapter 12: Gross Domestic Product and Growth Section 3 Objectives 1. Analyze how economic growth is measured. 2. Explain what capital deepening is and how it contributes to economic growth. 3. Analyze
More information2.2 Aggregate demand and aggregate supply
The business cycle Short-term fluctuations and long-term trend Explain, using a business cycle diagram, that economies typically tend to go through a cyclical pattern characterized by the phases of the
More informationThe Goods Market and the Aggregate Expenditures Model
The Goods Market and the Aggregate Expenditures Model Chapter 8 The Historical Development of Modern Macroeconomics The Great Depression of the 1930s led to the development of macroeconomics and aggregate
More informationEastern Mediterranean University Faculty of Business and Economics Department of Economics Spring Semester
Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2015-16 Spring Semester Duration: 90 minutes ECON102 - Introduction to Economics II Final Exam Type A 2 June 2016
More informationPre-Test Chapter 9 ed17
Pre-Test Chapter 9 ed17 Multiple Choice Questions 1. Which of the following statements is incorrect? A. Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium
More informationGCE. Edexcel GCE Economics (6353) Summer Edexcel GCE. Mark Scheme (Results) Economics (6353)
GCE Edexcel GCE Economics (6353) Summer 2005 Mark Scheme (Results) Edexcel GCE Economics (6353) 2 6353/01 MARK SCHEME June 2005 Question 1 Section (a)(i) Define annual real GDP growth. Year on year (1)
More informationMacroeconomics. PartC
M08_SLOM2410_05_SE_C08.QXD 11/13/09 11:28 AM Page 231 PartC Macroeconomics 8 Aggregate demand and the national economy 233 9 Aggregate supply and growth 271 10 Banking, money and interest rates 301 11
More informationPART 6 The macroeconomic environment
PART 6 The macroeconomic environment 1 of 38 Economy s Income & Expenditure Gross Domestic Product (GDP) Measures the total income of everyone in the economy Measures the total expenditure on the economy
More informationIntermediate Macroeconomics. Second Year
Q1: MCQ Intermediate Macroeconomics Open economy 1. Net exports are: Second Year Section (1) Revision A) that portion of consumption and investment goods sent to other countries. B) exports plus imports.
More informationMEASURING GDP AND ECONOMIC GROWTH
21 MEASURING GDP AND ECONOMIC GROWTH GDP Defined GDP or gross domestic product is the market value of all final goods and services produced in a country in a given time period. This definition has four
More informationChapter 19. What Macroeconomics Is All About. In this chapter you will learn to. Key Macroeconomic Variables. Output and Income
Chapter 19 What Macroeconomics Is All About In this chapter you will learn to 1. Describe the meaning and importance of the key macroeconomic variables, including national income, unemployment, inflation,
More informationECON 101 Introduction to Economics 1
ECON 101 Introduction to Economics 1 Session 1 Introduction I Lecturer: Mrs. Hellen Seshie-Nasser, Department of Economics Contact Information: haseshie@ug.edu.gh College of Education School of Continuing
More informationChapter 5 Measuring a Nation's Income
Chapter 5 Measuring a Nation's Income Problem set 1. Which of the following headlines would be most closely related to what macroeconomists study? a. Unemployment rate rises from 5 percent to 5.5 percent.
More informationFEEDBACK TUTORIAL LETTER ASSIGNMENT 2 INTERMEDIATE MACRO ECONOMICS IMA612S
FEEDBACK TUTORIAL LETTER 2 nd SEMESTER 2017 ASSIGNMENT 2 INTERMEDIATE MACRO ECONOMICS 1 ASSIGNMENT 2 SECTION A [20 marks] QUESTION 1 [20 marks, 2 marks each] For each of the following questions, select
More informationEconomics is the study of decision making
TOPIC 1 - INTRODUCTION TO THE GLOBAL ECONOMY WHAT IS ECONOMICS Economics is the study of decision making Every time we take a decision, we are choosing between at least two possibilities How do you take
More informationMacroeconomics. for AS Level. 2nd Edition. Andrew Threadgould
Macroeconomics for AS Level 2nd Edition Andrew Threadgould Contents Contents Chapter 1 The Macroeconomy................................................... 1 Chapter 2 Economic Growth.....................................................
More informationMacroeconomics CHAPTER 7. Tracking the Macroeconomy
Macroeconomics CHAPTER 7 Tracking the Macroeconomy PowerPoint Slides by Can Erbil 2006 Worth Publishers, all rights reserved What you will learn in this chapter: How economists use aggregate measures to
More informationMACROECONOMICS II INVESTMENT DEMAND (SPENDING)
MACROECONOMICS II INVESTMENT DEMAND (SPENDING) Macroeconomics 2 Lecture Material Prepared by Dr. Emmanuel Codjoe 1 In macroeconomics, Investment Demand is important for two reasons: 1) Volatile and hence
More informationProfessor Christina Romer. LECTURE 15 MACROECONOMIC VARIABLES AND ISSUES March 9, 2017
Economics 2 Spring 2017 Professor Christina Romer Professor David Romer LECTURE 15 MACROECONOMIC VARIABLES AND ISSUES March 9, 2017 I. MACROECONOMICS VERSUS MICROECONOMICS II. REAL GDP A. Definition B.
More informationChapter 47: HL extension the Keynesian multiplier (2.3)
Chapter 47: HL extension the Keynesian multiplier (2.3) HL extensions Circular flow revisited Calculation of the multiplier (k) Diagrammatical illustration Evaluation of the multiplier The nature of the
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 5
Economics 2 Spring 2016 Professor Christina Romer Professor David Romer SUGGESTED ANSWERS TO PROBLEM SET 5 1. The left-hand diagram below shows the situation when there is a negotiated real wage,, that
More informationEXAMINATION : MACROECONOMICS (MAC) ECONOMICS 1 (ECO101)
Page 1 of 6 EXAMINATION : MACROECONOMICS (MAC) ECONOMICS 1 (ECO101) DATE : 21 MAY 2014 TIME ALLOWED : 3 HOURS TOTAL MARKS : 100 MATERIAL SUPPLIED : ANSWER BOOK INSTRUCTIONS TO CANDIDATES 1. Please refer
More informationLecture 5: Measuring a Nation s Wealth. Rob Godby University of Wyoming
Lecture 5: Measuring a Nation s Wealth Rob Godby University of Wyoming Macroeconomics Macroeconomics is the study of the economy as a whole. Its goal is to explain the economic changes that affect many
More informationNational Income. What is National Income?
National Income What is National Income? This is income accruing to the permanent residents of a country from current economic activity during a specified period, usually one year. What determines the
More information8 THE DATA OF MACROECONOMICS
8 THE DATA OF MACROECONOMICS Measuring a Nation s Income 23 Measuring a Nation s Income Microeconomics Microeconomics is the study of how individual households and firms make decisions and how they interact
More informationECO 209Y MACROECONOMIC THEORY LECTURE 1: INTRODUCTION AND POLICY. Gustavo Indart. Slide 1
ECO 209Y MACROECONOMIC THEORY AND POLICY LECTURE 1: INTRODUCTION Slide 1 BRANCHES OF ECONOMICS Microeconomics is concerned with the study of the choice problem faced by the economic agents: households
More informationIntroduction to Macroeconomics
Macroeconomics versus Microeconomics? Micro: Greek for small Microeconomics: the study of the parts of the economy. Macro: Greek for large Macroeconomics: the study of the whole economy 1 2 Macroeconomics
More informationThe Macroeconomic Theory of the Open Economy: Chapter 13 Continued Net Capital Outflow: The Link between the two markets
The Macroeconomic Theory of the Open Economy: Chapter 13 Continued In an open economy: o National saving o Domestic investment o Net foreign investment (NCO) o The exchange rate o Net exports (NX) Are
More informationWhat is Macroeconomics?
Introduction ti to Macroeconomics MSc Induction Simon Hayley Simon.Hayley.1@city.ac.uk it What is Macroeconomics? Macroeconomics looks at the economy as a whole. It studies aggregate effects, such as:
More informationINTRODUCTION TO MACRO ECONOMICS. Zoubida SAMLAL - MBA, CFA Member, PHD candidate for HBS program
INTRODUCTION TO MACRO ECONOMICS Zoubida SAMLAL - MBA, CFA Member, PHD candidate for HBS program ECONOMICS Why do people study economics? Many study it because they hope to make money. Some worry that they
More informationLESSON 19 NATIONAL INCOME - 1 Circular Flow and Measurement of National Income. Learning outcomes
LESSON 19 NATIONAL INCOME - 1 Circular Flow and Measurement of National Income Learning outcomes After studying this unit, you should be able to: Understand national income Importance of national income
More informationLong Run vs. Short Run
Long Run vs. Short Run Long Run: A period long enough for nominal wages and other input prices to change in response to a change in the nation s price level. The Basic Model of Economic Fluctuations Two
More informationOCR Unit 2. Economics Revision. Judah Chandra
1 OCR Unit 2 Economics Revision Economics Revision Judah Chandra 2 AD = C + I + G (X - M) KEY TERMS Economic growth - in the short run, an increase in real GDP, and in the long run, an increase in productive
More informationIntroduction to Macroeconomics. Introduction to Macroeconomics
C H A P T E R 17 Introduction to Macroeconomics Prepared by: Fernando Quijano and Yvonn Quijano Introduction to Macroeconomics Microeconomics examines the behavior of individual decision-making units business
More informationEdexcel (B) Economics A-level
Edexcel (B) Economics A-level Theme 2: The Wider Economic Environment 2.5 The Economic Cycle 2.5.2 Circular flow of income, expenditure and output Notes The circular flow of income Firms and households
More informationECONOMICS. Time Allowed: 3 hours Maximum Marks: 100
Sample Paper (CBSE) Series ECO/SP/1B Code No. SP/1-B ECONOMICS Time Allowed: 3 hours Maximum Marks: 100 General Instructions: (i) All Questions in both the sections are compulsory. However there is internal
More informationLecture Investment and Saving
Lecture 3-1 4. Investment and Saving Investment is the portion of final product that adds to the nation s stock of income-yielding physical assets or that replaces old, worn-out physical assets. The goods
More informationIn this chapter, look for the answers to these questions
In this chapter, look for the answers to these questions How does the interest-rate effect help explain the slope of the aggregate-demand curve? How can the central bank use monetary policy to shift the
More informationModule 1 Introduction
Module 1 Introduction 1 Unit Structure : 1.0 Objectives 1.1 Distinction between Microeconomics and Macroeconomics 1.2 Circular flow of Economic activities 1.3 Gross National Product (GNP) 1.4 Net National
More informationMacroeconomics Study Sheet
Macroeconomics Study Sheet MACROECONOMICS Macroeconomics studies the determination of economic aggregates. Output tends to rise in the long run (longterm economic growth), but fluctuates in the short run
More informationFinal Term Papers. Fall 2009 (Session 03) ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 (Session 03) ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program
More informationEconomics 302 Intermediate Macroeconomic
Economics 302 Intermediate Macroeconomic Theory and Policy (Spring 2010) Lecture 28-29 May 3-5, 2010 slide 0 Outline Why is the long run important? The determinants of economic growth Full employment and
More informationMeasuring a Nation s Income
Chapter 22 Measuring a Nation s Income Test A 1. Macroeconomics is the study of a. market regulation. b. money and financial markets. c. economy-wide phenomena. d. how households and firms make decisions
More informationTHE INFLUENCE OF MONETARY AND FISCAL POLICY ON AGGREGATE DEMAND
20 THE INFLUENCE OF MONETARY AND FISCAL POLICY ON AGGREGATE DEMAND LEARNING OBJECTIVES: By the end of this chapter, students should understand: the theory of liquidity preference as a short-run theory
More informationA-level Economics 7136/3
SPECIMEN MATERIAL SECOND SET A-level Economics 7136/3 Paper 3 Economic principles and issues Specimen 2015 Morning 2 hours Materials For this paper you must have: the source booklet a calculator. Instructions
More informationIM Syllabus ( ): Economics IM SYLLABUS ( ) ECONOMICS IM 08 SYLLABUS
IM SYLLABUS (2011-2014) ECONOMICS IM 08 SYLLABUS 1 Economics IM 08 Syllabus (Available in September) Paper I: Written exam (3 hrs) Aim As a general guideline, the emphasis in the teaching and examination
More informationECONOMICS EXAMINATION OBJECTIVES
ECONOMICS EXAMINATION OBJECTIVES The following objectives of the examination are to test whether the candidates have acquired a basic understanding of economics with special emphasis on Hong Kong conditions
More informationAS ECONOMICS Paper 2 The national economy in a global context
Please write clearly in block capitals. Centre number Candidate number Surname Forename(s) Candidate signature AS ECONOMICS Paper 2 The national economy in a global context Monday 23 May 2016 Morning Time
More informationThe Influence of Monetary and Fiscal Policy on Aggregate Demand P R I N C I P L E S O F. N. Gregory Mankiw. Introduction
C H A P T E R 34 The Influence of Monetary and Fiscal Policy on Aggregate Demand P R I N C I P L E S O F Economics N. Gregory Mankiw Introduction This chapter focuses on the short-run effects of fiscal
More informationAustralian National University. Graduate Diploma Macroeconomics Econ Rod Tyers. 5: The Balance of Payments
Australian National University Graduate Diploma Macroeconomics Econ 8026 Rod Tyers 5: The Balance of Payments Components of the current account Components of the capital account The home economy and the
More informationECON 1000 B. Come to the PASS workshop with your mock exam complete. During the workshop you can work with other students to review your work.
It is most beneficial to you to write this mock midterm UNDER EXAM CONDITIONS. This means: Complete the midterm in hour(s). Work on your own. Keep your notes and textbook closed. Attempt every question.
More informationNo 02. Chapter 1. Chapter Outline. What Macroeconomics Is About. Introduction to Macroeconomics
No 02. Chapter 1 Introduction to Macroeconomics Chapter Outline What Macroeconomists Do Why Macroeconomists Disagree Macroeconomics: the study of structure and performance of national economies and government
More informationEconomics 2002 HIGHER SCHOOL CERTIFICATE EXAMINATION. Total marks 100. Section I. Pages 2 8
2002 HIGHER SCHOOL CERTIFICATE EXAMINATION Economics Total marks 100 Section I Pages 2 8 General Instructions Reading time 5 minutes Working time 3 hours Write using black or blue pen Board-approved calculators
More informationPrinciple of Macroeconomics, Summer B Practice Exam
Principle of Macroeconomics, Summer B 2017 Practice Exam 1) If real GDP in a small country in 2015 is $8 billion and real GDP in the same country in 2016 is $8.3 billion, the growth rate of real GDP between
More informationDistance Learning Programme. IAS Prelims INDIAN ECONOMY
Distance Learning Programme IAS Prelims INDIAN ECONOMY CONTENTS 1. Introduction to Economics 5-11 2. Concepts of National Income 12-20 3. Human Development 21-30 4. Poverty, Unemployment & Inequality 31-49
More informationCHAPTER 8. MACROECONOMIC SUPPLY AND DEMAND
CHAPTER 8. MACROECONOMIC SUPPLY AND DEMAND There are four markets of primary interest to macroeconomics: Product, Credit, Labor, and Foreign Exchange. Each can be modeled using supply and demand. For each
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 5
Economics 2 Spring 2017 Professor Christina Romer Professor David Romer SUGGESTED ANSWERS TO PROBLEM SET 5 1. The tool we use to analyze the determination of the normal real interest rate and normal investment
More informationMACROECONOMICS ESSENTIALS FOR CIVIL SERVICE EXAMINATIONS
2018 WWW.OBJECTIVEIAS.IN MACROECONOMICS ESSENTIALS FOR CIVIL SERVICE EXAMINATIONS Special Features: 1. Detailed Explanation of Each Concept 2. Important Key Words at the end of Each Unit 3. Check your
More informationMEASURING GDP AND ECONOMIC GROWTH. Objectives. Gross Domestic Product. An Economic Barometer. Gross Domestic Product. Gross Domestic Product CHAPTER
MEASURING GDP AND ECONOMIC CHAPTER GROWTH Objectives After studying this chapter, you will able to Define GDP and use the circular flow model to explain why GDP equals aggregate expenditure and aggregate
More information2.1 Economic activity The level of overall economic activity
2.1 Economic activity The level of overall economic activity Learning Outcomes Describe, using a diagram, the circular flow of income between households and firms in a closed economy with no government.
More informationThinking Like an Economist
Thinking Like an Economist CHAPTER 2 Every field of study has its own terminology Mathematics axioms integrals vector spaces Law torts Promissory estoppel venues Psychology id ego cognitive dissonance
More informationTest Bank INTRODUCTION TO INTERNATIONAL ECONOMICS
Test Bank Carol O. Stivender University of North Carolina at Charlotte INTRODUCTION TO INTERNATIONAL ECONOMICS Second Edition Dominick Salvatore Fordham University John Wiley & Sons, Inc. Chapter 1 - Introduction
More informationMidterm #2, version A, given Spring 2002 Note question #50 is from Chapter 11, which students are not responsible for on Exam 2 - Summer 02.
Midterm #2, version A, given Spring 2002 Note question #50 is from Chapter 11, which students are not responsible for on Exam 2 - Summer 02. Answers (if you think you see an error, please contact me ASAP.
More informationRevision Sheets. AS Economics National Economy in a Global Context. Revision Sheets
2018 http://www.publicdomainpictures.net/pictures/150000/velka/uk-map.jpg AS Economics National Economy in a Global Context Macroeconomic Objectives Low unemployment Improve external performance Objectives
More informationFiscal policy. Macroeconomics 5th lecture
Fiscal policy Macroeconomics 5th lecture Reminder Transactions by the government Firms Commodity market transfer payments taxes Government transfer payments taxes Households Financial markets 2 Fiscal
More informationAGGREGATE DEMAND. 1. Keynes s Theory
AGGREGATE DEMAND 1. Keynes s Theory - John Maynard Keynes (1936) criticized classical theory for assuming that AS alone capital, labor, and technology determines national income proposed that low AD is
More informationEdexcel Economics (A) A-level Theme 2: The UK Economy - Performance and Policies 2.2 Aggregate Demand
Edexcel Economics (A) A-level Theme 2: The UK Economy - Performance and Policies 2.2 Aggregate Demand Detailed Notes 2.2.1 The characteristics of Aggregate Demand Aggregate demand (AD) is the total level
More informationA Macroeconomic Theory of the Open Economy. Chapter 30
A Macroeconomic Theory of the Open Economy Chapter 30 Key Macroeconomic Variables in an Open Economy The important macroeconomic variables of an open economy include: net exports net foreign investment
More informationECO401- Final Term Subjective
ECO401- Final Term Subjective Current Paper 20 July 2013 What is meant by non price competition? Non price competition means competition amongst the firms based on factors other than price, e.g. advertising
More informationTopic 1: National Accounting, Keynesian Income-Expenditure Model and Fiscal Policy
Topic 1: National Accounting, Keynesian Income-Expenditure Model and Fiscal Policy The Circular Flow of Income and Expenditure Circular flow of income and expenditure is a simple representation of the
More informationMacroeconomics CHAPTER 6. Macroeconomics: The Big Picture
Macroeconomics CHAPTER 6 Macroeconomics: The Big Picture PowerPoint Slides by Can Erbil 2006 Worth Publishers, all rights reserved What you will learn in this chapter: An overview of macroeconomics, the
More informationtest 1 1. A well-tested economic theory is often called: A. an hypothesis. B. a prototype. C. a principle. D. an anomaly.
test 1 Student: 1. A well-tested economic theory is often called: A. an hypothesis. B. a prototype. C. a principle. D. an anomaly. 2. Macroeconomics can best be described as the: A. analysis of how a consumer
More informationInterview Preparation Lecture. Venue: Career Launcher Tambaram Centre Date: 26 th January, 2018
Interview Preparation Lecture Venue: Career Launcher Tambaram Centre Date: 26 th January, 2018 Session One Duration: 1.5 hours What to expect from B-schools & what B-schools expects from you Why Economics??
More information4.2 Fiscal Policy.notebook May 02, Fiscal Policy
4.2 Fiscal Policy How do we achieve our three economic objectives? Economic Growth Full Employment Steady inflation With Monetary and Fiscal Policy! Review of the Business Cycle A cycle goes through a
More informationMODERN PRINCIPLES OF ECONOMICS Third Edition ECON 322 INTERMEDIATE MACROECONOMIC THEORY
MODERN PRINCIPLES OF ECONOMICS Third Edition ECON 322 INTERMEDIATE MACROECONOMIC THEORY 1 MODERN PRINCIPLES OF ECONOMICS Third Edition Why learn about macroeconomics? 5 ECONOMIC QUESTIONS THAT WILL SHAPE
More informationLecture 22. Aggregate demand and aggregate supply
Lecture 22 Aggregate demand and aggregate supply By the end of this lecture, you should understand: three key facts about short-run economic fluctuations how the economy in the short run differs from the
More informationUnderstanding Economics
Understanding Economics 4th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson Understanding Economics 4 th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson Chapter 8 Measures of Economic
More informationChapter 4 Monetary and Fiscal. Framework
Chapter 4 Monetary and Fiscal Policies in IS-LM Framework Monetary and Fiscal Policies in IS-LM Framework 64 CHAPTER-4 MONETARY AND FISCAL POLICIES IN IS-LM FRAMEWORK 4.1 INTRODUCTION Since World War II,
More informationLecture 7. Fiscal Policy
Lecture 7 Fiscal Policy The role of government spending and taxes Fiscal policy: government spending and tax policy AD = C + II + G What if G changes? What is the effect on Y? How large is (government)
More informationMacroeconomics Mankiw 6th Edition
N. Gregory Mankiw Lecture notes, ECON 1150 Macroeconomics Mankiw 6th Edition 21 & 22 The Influence of Monetary and Fiscal Policy on Aggregate Demand Premium PowerPoint Slides by Ron Cronovich 2012 UPDATE
More informationLesson 12 The Influence of Monetary and Fiscal Policy on Aggregate Demand
Lesson 12 The Influence of Monetary and Fiscal Policy on Aggregate Demand Henan University of Technology Sino-British College Transfer Abroad Undergraduate Programme 0 In this lesson, look for the answers
More informationUNIVERSITY OF TORONTO Faculty of Arts and Science. August Examination 2006 ECO 209Y
UNIVERSITY OF TORONTO Faculty of Arts and Science August Examination 2006 ECO 209Y Duration: 2 hours Examination Aids allowed: Non-programmable calculators only INSTRUCTIONS: Students are required to answer
More informationKarl Marx and Market Failure
Unit 3 Karl Marx and Market Failure Krugman Module 74 pp. 723-726; Module 76 pp. 743-750; Module 77 pp.754-756; Module 78 pp. 761-770; Module 79 pp. 782-785 Modules 17-19 pp. 172 198 1 Greed is Good. -The
More informationCHAPTER 1 Introduction
CHAPTER 1 Introduction CHAPTER KEY IDEAS 1. The primary questions of interest in macroeconomics involve the causes of long-run growth and business cycles and the appropriate role for government policy
More informationTHE INFLUENCE OF MONETARY AND FISCAL POLICY ON AGGREGATE DEMAND
21 THE INFLUENCE OF MONETARY AND FISCAL POLICY ON AGGREGATE DEMAND LEARNING OBJECTIVES: By the end of this chapter, students should understand: the theory of liquidity preference as a short-run theory
More informationThe Aggregate Expenditures Model. A continuing look at Macroeconomics
The Aggregate Expenditures Model A continuing look at Macroeconomics The first macroeconomic model The Aggregate Expenditures Model What determines the demand for real domestic output (GDP) and how an
More informationChapter 11: Fiscal Policy in the Short Run
Royal School of Administration Chapter 11: Fiscal Policy in the Short Run Lectured by: HE (Dr.) MAM AMNOT Group 9: 1. Chek Rasy 2. Chuop Theot Therith 3. Eath Sovanara 4. Hang Kakdareasey 5. Srun Sreyneang
More informationTHE ASSOCIATION OF ACCOUNTING TECHNICIANS OF SRI LANKA FOUNDATION EXAMINATION - JULY 2014 (52) ECONOMICS
All Rights Reserved THE ASSOCIATION OF ACCOUNTING TECHNICIANS OF SRI LANKA FOUNDATION EXAMINATION - JULY 2014 Time: 02 hours Instructions to candidates (52) ECONOMICS 19-07-2014 Afternoon [2.00 4.00] (1)
More informationDownloaded from
XII ECONOMICS SURE SHOT SHORT ANSWER QUESTIONS MICROECONOMICS UNIT - INTRODUCTION Q. Distinguish between microeconomics and macroeconomics. 3 Q.2 Discuss the central problems of an economy. Why do they
More informationAS Economics: ECON2 Economics: The National Economy 2009/10
2 weeks 1 st Sep - 11 th Sep Term 1 Introduction to the objectives and instruments of government This is an introduction to 3.2.3, 3.2.1 macroeconomic policy the Unit and most of the content Candidates
More informationECO 120 Survey of Economics
ECO 120 Survey of Economics Revised: Fall 2016 COURSE OUTLINE Prerequisites: None Course Description: Presents a broad overview of economic theory, history, development, and application. Introduces terms,
More informationAP Macroeconomics Formulas and Definitions: Key Formulas
AP Macroeconomics Formulas and Definitions: Key Formulas 1. Rule of 70: Used to determine how many years it takes for a value to double, given a particular annual growth rate. For example, if you put $20,000
More informationSAMPLE QUESTION PAPER II ECONOMICS Class - XII BLUE PRINT
SAMPLE QUESTION PAPER II ECONOMICS Class - XII Maximum Marks 100 Time : 3 hrs. BLUE PRINT Sl. No. Form of Very Short Short Answer Long Answer Total Questions (1 Mark) (3, 4 Marks) (6 Marks) Content Unit
More information2015 EXAMINATIONS ECONOMICS - MSS J133 JOINT UNIVERSITIES PRELIMINARY EXAMINATIONS BOARD MULTIPLE CHOICE QUESTIONS
JOINT UNIVERSITIES PRELIMINARY EXAMINATIONS BOARD 2015 EXAMINATIONS ECONOMICS - MSS J133 MULTIPLE CHOICE QUESTIONS 1. The fundamental problem of economics is A. The establishment of a political framework
More informationRecall from Econ 200:
Chapter 2: The Data of Macroeconomics Recall from Econ 200: Macroeconomics is the study of the economy a whole, including growth in incomes, changes in price, and the rate of unemployment. Macroeconomists
More information