Unemployment and inflation

The rise in energy prices reduces the productivity of capital per worker. This causes sf(k) to shift down from sfl(k) to sf2(k). The result is a decline in steady-state k. Steady-state consumption per worker falls for two reasons: (1) Each unit of capital has a lower productivity, and (2) steady-state k is reduced. population growth rate permanently increased due to increased immigration Immigration raises n from nl to n2. The rise in n lowers steady-state k, leading toa lower steady-state consumption per worker. c.A temporary rise in s has no effect on the steady-state equilibrium. . The increase in the labor force participation rate does not affect the growth rate of the labor force, so there is no impact on the steady-state capital-labor ratio or on consumption per worker. However, because a larger fraction of the population is working, consumption per person increases. Question 4 How would each of the following affect the national saving, investment the current account balance an d the real interest rate in the large economy (a) The home countrys saving curve shifts to the right, from Sl to S2.The real world interest rate falls, so that the current account surplus in the home country equals the current ccount deficit in the foreign country. National S rises, I rises, CA rises, rw falls. (b) The foreign countrys saving curve shifts to the right, from Sl For to S2For. The real world interest rate must fall, so the current account surplus in the foreign country equals the current account deficit in the home country. National S falls, I rises, CA falls, rw falls.C The foreign countrys saving curve shifts to the left, from Sl For to S2For. The real world interest rate must rise, so the current account deficit in the foreign country equals the current account surplus in the home country. National S rises, I falls, CA ises, rw rises. (c) If Ricardian equivalence holds, there is no effect. If Ricardian equivalence does not hold, then the result is the same as in par t (b), as the toreign count saving curve shifts to the right.That is because all else equal, higher taxes increase government saving more than they reduce private saving. Question 3. Explain how each of the following transaction would enter the Bahamas Question 3 a Income receipt from abroad: credit entry in current account. b Import of assets: debit entry in capital and financial account. (c Import of services: debit entry in current account. (d Increase in foreign ownership of U. S. assets: credit entry in capital and financial account. Question2.Assume (a) Desired consumption declines as the real interest rate rises because the higher return to saving encourages higher saving; desired investment declines as the real interest rate rises becauses the user cost of capital is higher, reducing the desired capital stock, and thus investment. (b) Recall that Sd = Y -Cd – G, so Sd = 9000 -Cd – ld 2 6100 1 500 3 1400 1 ooo 4 5900 1300 1100 9200 5 1200 6 5700 equilibrium. Giv en Y 9000, the equili brium condition holds only at r = 5%. Atr = 5% it is also true that Sd = = 1200. Question 1Keynesians and classicals differ sharply in their beliefs about how long it takes the economy to reach a long-run equilibrium. Classical economists believe that prices adjust rapidly (within a few months) to restore equilibrium in the face of a shock, while Keynesians believe that prices adjust slowly, taking perhaps several years. Because of the time it takes for the economy's equilibrium to be restored, Keynesians see an important role for the government in fighting recessions. But because classicals believe that equilibrium is restored quickly, there's no need for government policy to fght recessions.Since classicals think equilibrium is restored quickly in the face of shocks, aggregate demand shocks can't cause recessions, since they can't affect output for very long. So classical economists think recessions are caused by aggregate supply shocks. Keynesians, however, think that both aggregate demand and aggregate supply shocks are capable of causing recessions. Question 8 Growth that is â€Å"too rapid† most likely refers to a situation in which the aggregate demand curve has shifted to the right and, in the short run, intersects the SRAS curve at a level of output that's greater than the full-employment level of output.This situation is associated with inflation because, in the long run, prices will rise, shifting the SRAS curve up to intersect with the LRAS and AD curves. The shock that is implicitly assumed to be hitting the economy is an aggregate demand shock, since that's the only shock that increases output in the short run and inflation in the long run. Question 10 The temporary increase in government purchases causes an income effect that increases workers' labor supply. This results in an increase in the full-employment level of output from FEI to FE2 in Figure 10. 10.The increase in government urchases also shifts the IS curve up and to the right from ISI to IS2, as it reduces national saving. Assuming that the shift up of the IS curve is so large that it intersects the LM curve to the right of the FE line, the price level must rise to get back to equilibrium at full employment, by shifting the LM curve up and to the left from LMI to LM2. The result is an increase in output and the real interest rate. figure 10. 11 shows the impact on the labor market. Labor supply shifts from NSI to NS2, leading to a decline in the real wage and a rise in employment.Average labor productivity declines, since employment rises while capita ixed. Investmentdeclines, since the real interest rate rises. To summarize, in response to a temporary increase in government purchases, output, the real interest rate, the price level, and employment rise, while average labor productivity and investment decline. (a) The business cycle fact is that employment is procyclical. The model is consistent with this fact, since employment rises when government purchases rise, causing output to rise. (b) The business cycle fact is that the real wage is mildly procyclical.The model is inconsistent with this fact, since it shows a decline in the real wage when government purchases rise and c) The business cycle fact is that average labor productivity is output rises. procyclical. The model is inconsistent with this fact, since it shows a decline in average labor productivity when government purchases rise and output rises. (d) The business cycle fact is that investment is procyclical. The model is not consistent with this fact, as investment falls when government purchases rise and output rises. (e) The business cycle fact is that the price level is procyclical.The model is consistent with this fact, as the price level rises when government purchases increase and output increases. Question 6 and 7 (a) An increase in government purchases reduces national saving, causing the real interest rate to rise for a fixed level of incom e. If the real interest rate is higher, then real money demand will be lower. The price level must rise. The result is that output is unchanged, the real interest rate increases, and the price level increases. 6 (b) 7aWhen expected inflation falls, real money demand increases.There is no effect on employment, saving or investment, so output and the real interest rate remain unchanged. With higher real money demand and an unchanged nominal money supply, the equilibrium price level must decline. b) When labor supply rises, full- employment output increases. Higher output means higher income, so saving will increase. More saving means the real interest rate will decline. Both higher output and a lower real interest rate increase real money demand. Higher money demand with a constant money supply means the price level must decline. 17 c When the interest rate paid on money increases, real money demand rises. That is because the cost of holding money falls. With no effect on employment o r saving and investment, output and the real interest rate remain unchanged. With higher real money demand and an unchanged nominal money supply, the quilibrium price level must decline. Question 11 and 12 In Figures 11 . 17-11. 20, point A is the starting point, point B shows the short-run equilibrium after the change, and point C shows the long-run equilibrium after the change. (a) In Figure 11. 7, when banks pay a higher interest rate on checking accounts, the demand for money rises, shifting the LM curve up and to the left from LMI to LM2 in Figure 11 . 17(a). As a result, the AD curve shifts down and to the 2 in Figure ) The new snort-run equilibrium occurs at point B, where output is lower, the real interest rate is higher, employment is lower, and the price level is unchanged. In the long run, the price level decreases to shift the LM curve from LM2 to LM3, which is the same as LMI, to restore equilibrium at point C. As a result, the short-run aggregate supply curve shifts do wn from SRASI to SRAS2.At the new equilibrium, compared to the starting point, output is the same, the real interest rate is the same, employment is the same, and the price level is lower. Figure 11. 17 (b) In Figure 11. 18, the introduction of credit cards reduces the demand for money†shifting the LM curve down and to the right from LMI to LM2 in Figure 11 . 18(a). As a result, the AD curve shifts from ADI to AD2 in Figure 11. 8(b). The new short-run equilibrium occurs at point B, where output is higher, the real interest rate is lower, employment is higher, and the price level is unchanged.In the long run, the price level increases to shift the LM curve from LM2 to LM3, which is the same as LMI, to restore equilibrium at point C. As a result, the short-run aggregate supply curve shifts up from SRASI to SRAS2. At the new equilibrium, compared to the starting point, output is the same, the real interest rate is the same, employment is the same, and the price level is higher. F igure 11. 18 (c) In Figure 11. 9, the reduction in agricultural output shifts the FE curve to the left from FEI to FE2, and shifts the LRAS line from LRASI to LRAS2.The rise in agricultural prices increases the price level, so the short-run aggregate supply curve shifts up from SRASI to SRAS2. Also, the rise in the price level shifts the LM curve up and to the left from LMI to LM2. The short-run equilibrium is at point B, assuming that the LM curve shifts so much that it intersects the IS curve to the left of the FE line. At point B, compared to the starting point, output is lower, the real interest rate is higher, employment is lower, and the price level is higher. Figure 11. 19 If the water shortage persists, a new long-run equilibrium occurs at point C.To get to this equilibrium, the price level must decline, shifting the LM curve from LM2 to LM3, and the short-run aggregate supply curve from SRAS2 to SRAS3. Relative to point B, the new equilibrium has a higher output level, a lo wer real interest rate, higher employment, and a lower price level. (Relative to the initial equilibrium at point A, output and employment are lower, and the real interest rate and the price level are higher.

Global Economic Crisis: Implications and Challenges to the Philippines Essay

This is a forum where we can wonder, what is really happening in our country? Mr. W.D. Hilton our keynote speaker discussed the possible effects of the Global Economic Crisis in the Philippines. In this paper, I will write some of the highlights when we talked about Global Economic Crisis. The primary target of the said crisis is the people. There are so many people suffering in crisis and covered by clouds of hopelessness. Is there any hope, waiting for us to a brighter prospect of life? There are so many problems that we are experiencing right now. For our country Philippines, the Global Economic Crisis really put our country at stake. There is a big probability that there are many fellow Filipinos will be put to the test; on how high are their faith and how strong they are in facing the Economic crisis as of now. As a citizen concern, there are so many questions that are bothering to me at this time such as, what is Global crisis exactly means? When will economic crisis end? How to cope with the global financial crisis? And, what would be the possible effects of Economic crisis in the Philippines? What is really a Global Economic Crisis means? Based on my own understanding, Global Economic Crisis is the situation where more than one country is affected by scarcity of resources to be needed enable to provide for all citizens globally. When you say crisis, as what the dictionary defined it as, a condition of instability or danger in social, economic, political or international affairs leading to decisive change. This definition implies that our country is obviously affected by the so called Global Economic Crisis. As what the symposium explained and emphasized during the discussion, it is visible to the eye that we are one of the most affected by the crisis because as a third world country, this is not impossible to happen. The hardest question that crossed my mind was, when will economic crisis end? This would be a difficult question that the answer is still unclear for us, Filipinos. Another question is, is the Philippine Economy ready to battle the Global Financial Hardship? In our status right now, we are still struggling for some very broad reasons such as, corruptions, poor leaderships and rich in stealing wealth from others. If we still continue this type of system in our country, there’s no hope for any survival in crisis. Our superior in the government doesn’t have any heart for the poor and the rich people are getting richer. As a democratic country, how can we fight for what is right when all that we have is the left over of the government? Global economic Crisis touches the people’s lives negatively in some other ways. Here is some example of situations that is occurring right now. We can’t stop the time from approaching to us and will surprise us that one day; there would be a downsizing in the organization. One of the main reasons of downsizing of employees is, the company cannot afford to pay their salaries anymore due to financial crisis. It is hard for the organization to motivate their employees well because of lack benefits and expenses for their compensations would be budgeted only. For those who graduated recently, it would be difficult for them to get hired because there are no available jobs for them or the organizations are not yet ready for hiring new employees. It implies that there is no assurance even if you are holding a degree. Unfortunately, for the undergraduates are more difficult for them to find a job because of no vacancies for them available. For the prices of products or goods in the store, the consumer will buy it by bundles or dozens because they are aware or expecting that there is a price hiking because of high demand of goods. This is also the time that only few consumers because only few people can afford for the expensive price. That’s why they are taking the opportunity to buy the goods as many as possible. For our fellow Filipinos in other countries such as the OFW (Overseas Filipino Workers) they are also affected by Economic Crisis in such way. Have you heard the news that there was a time that the OFW’s were forced to send back to their respective countries due to poverty. Of course, the foreign country will prioritize first their fellow countrymen before the other citizens while experiencing the crisis in their country. Lastly, for those who are my fellow students also got affected. Example of this, they are millions of students taking up â€Å"Nursing† because it is in demand this time. Without noticing it, that there so much rivals or competitors with that job, to the extent that they are only few of them got a vacant seat due to overflowing of graduates with that course. Because of the crisis, they are hoping to go abroad, but unfortunately, they are only selected and rare people has the capability or could meet the requirements in going abroad. So, where are they going? It takes time to wait for other demand from other countries. With these situations, it would really pull us down. We are almost poor in everything even though we are rich in natural resources. We just didn’t know how to use our natural resources wisely. Even in making wise decisions are very hard for us. Poor in leadership, has a big impact in our country that’s why we are suffering and experiencing these unwanted state in life. We owe USA with a big amount. We are still hoping to pay for it but, if the occurring of corruptions in our country; it would be difficult for us to cope up because if greediness ruling inside of us, with no hesitations, our country is slowly dying. To sum up everything, Global Economic Crisis is a big threat because we allow vulnerabilities and the threats to come. What would be the mitigating measure that we are going to use to cope up with the big crisis? I think truth shall always prevail. Our politics has a big part in our crisis right now. We should stress what should be stress out. We have to overcome the crisis this time because we are all accountable for whatever may happen.

Oxford City Council Research Proposal Essay

Oxford City Council (OCC) provides a range of recycling services, including kerbside collection services and recycling sites where residents can deposit items for recycling. Such schemes enable OCC to recycle approaching 40% of Oxford household waste currently. However, the UK government want to establish a recycling culture and continue to set increasing targets for household recycling, with an aim of reaching 50% by 2020. Following a recent (DEFRA) Department for Environment, Food and Rural Affairs initiative to allow the use of financial incentives for household waste minimisation and recycling, OCC is considering the introduction of a pilot scheme in selected postcodes areas. This would involve the introduction of bins fitted with microchips to monitor how much recycling and other waste a household produces, leading to refunds from local taxation bills for a good recycling performance or additional charges for a poor recycling performance. OCC is keen to understand likely reactions of residents to such a scheme and the overall impact that this might have on household recycling rates. OCC has invited the marketing research agency, Research Solutions to provide a proposal for marketing research to inform decision making. What is the research objective? A research objective is basically the main objective of the research i. e. the purpose of carrying out the research forms the research objective. The research objective is basically formed on the basis of the background of the research that is being conducted. (Creswell 2008). In this case, the main issue is recycling. This is due to the increasing population in the UK due to which the wastes have been increasing with a higher percentage. However, it is not a wise idea to leave the wastes just like that and it would be a very good option to recycle the waste so that it can be utilized again as the resources we own in the world today are limited but the demands of the people are unlimited. Therefore, it is always a good idea to save as much as possible so that we can save our future generations from suffering. The research objective of this research is that the UK government wants to establish a recycling culture and continue to set increasing targets for household recycling, with an aim of reaching 50% by 2020 in order to improve the previous targets. Previously, Oxford City Council provided a range of recycling services, including kerbside collection services and recycling sites where residents could deposit items for recycling and this enabled Oxford City Council to reduce the household waste by 40%. The idea now is to increase this percentage by 10% and to make it 50%. Problem Statement Before the research team assigned to solve the problem starts their job, a problem statement needs to be defined and to be presented to them and the problem statement should answer three main questions i. e. to define the problem and the reason why the team is required to solve this problem, the client who needs a solution to the problem and the scope as well as the limitations of the problem in terms of various issues such as time, money and other resources. Moreover, it is also important for the problem statement to address all the W’s i. e. to answer what, how, where, when, why, and who. (Denzin & Lincoln 2005). Referring to this case, due to the increasing need of recycling, the government of UK plans to increase recycling of the household wastes to 50% by 2020 i. e. an increase by 10% from today. This aim has been defined basically to serve the households and to meet their demand of recycling household wastes; however there are certain limitations that are coming in the way to meet this requirement of the government of UK. In order to solve this problem, we, a research team from a marketing research agency, Research Solutions has been assigned to work out and to know the likely reactions of residents to such a scheme and the overall impact that this might have on household recycling rates. For this purpose, What methods will be used? Following a recent (DEFRA) Department for Environment, Food and Rural Affairs initiative to allow the use of financial incentives for household waste minimisation and recycling, OCC is considering the introduction of a pilot scheme in selected postcodes areas. This would involve the introduction of bins fitted with microchips to monitor how much recycling and other waste a household produces, however this will involve a certain cost as Oxford City Council will have to make refunds from local taxation bills for a good recycling performance or to pay additional charges for a poor recycling performance. (Patton 2002). We will use both primary as well as secondary data to conduct our research as well as both qualitative and quantitative data. Once we have gathered the secondary data, we will then seek for primary data for which we will prepare a set of 200 questionnaires. The questionnaire, we have planed will consist of around 20 open and close ended questions. We will get these questionnaires filled and will also interview people in Oxford from different age groups especially the women as the issue is basically related to household recycling so the housewives would be the best option to interview. Data analysis The process of gathering, modeling and transforming data aiming to make the important information prominent, to suggest conclusions as well as to support the decision making is called data analysis. There are various approaches and techniques that can be used for this purpose under different domains. (Spatz & Kardas 2007). As Oxford City Council has been asked to increase recycling of household wastes by 10%, they now have to plan everything to achieve this goal but for this it is essential for the Oxford City Council to collect all the important information and to transform it. Therefore, to understand the likely reactions of residents to such a scheme and the overall impact that this might have on household recycling rates. A time schedule The government of UK wants the goal of an increase in the recycling of household wastes to be achieved by an increase of 10% by 2020 and this gives Oxford City Council more than a decade to achieve this aim. The Oxford City Council should plan out seriously and work on the aim that is to be met but before finally starting the work, it is always essential to conduct research in order to know whether the plans they have made will be successful of not and also to know the reaction of the people in the UK after the introduction of the pilot scheme in selected postcodes areas and before the plan can be executed, marketing research will be conducted whose timing is mentioned below. (Pan 2004). The time schedule will not just provide a timeframe but it will also help us meet the deadlines. As we have been assigned one month to conduct this research, we have accordingly divided the time to meet our goals in an efficient manner. In the first week, we plan to conduct desk research followed by qualitative fieldwork in the second week as well as to prepare a qualitative desk research report. On the first day of the third week, we aim to prepare questionnaires that will follow the quantitative stage, coding and data preparation. In the fourth week, that is also the last week, we will do the analysis, prepare a presentation and on the last day we will present a final report. Bibliography: Creswell, J. W. (2008). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. 3rd edn. Sage Publications. Denzin, N. K. , & Lincoln, Y. S. (2005). The Sage handbook of qualitative research. 3rd edn. Thousand Oaks, CA: Sage. Pan, M. L. (2004). Preparing literature reviews: Qualitative and quantitative approaches. 2nd edn. Los Angeles: Pyrezak. Patton, M. Q. (2002). Qualitative research and evaluation methods. Thousand Oaks, CA: Sage. Spatz,C. & Kardas,E. P. (2007). Research Methods in Psychology: Ideas, Techniques, and Reports. McGraw-Hill Humanities/Social Sciences/Languages, Hardcover.

Questions Assignment Example | Topics and Well Written Essays - 250 words - 15

Questions - Assignment Example Rules 4 and 5 are the most appealing because by adding value to the audiences’ life, marketers reap my seeing their efforts rewarded through improved sales turnover and ultimately profitability. Simplicity: The whole concept was very simple to understand and put into practical use. Given the entire process is done on one platform; Facebook, consumers found it convenient to download the App, make their cases to friends on why they deserved the piece and finally redeem the virtual and real pizza from the same online platform. Social Connection: The social element that involves sharing not only the fun involved in lobbying for a price but also sitting together for a real meal inn the end made the campaign add tangible social value to users. Uniqueness: At the time of its launch, there were not many campaigns that could convert virtual to real gifts and this distinctive aspect of the campaign made it stand out and eventually successful. The unique aspect of this campaign and millions of Facebook users gives Pizza Hut a reason to replicate this in the U.S with guaranteed success. The social aspect of the human race knows no geographic boundaries and the flavor this campaign added to friendships in Australia are what it would add to consumers of pizza in any part of the world, the U.S included. Pizza Hut should therefore replicate this campaign in the U.S before competitors come up with similar projects. Chiat Strategic Excellence Awards. (2011) Jay Chiat Awards Winners | "Feed a Friend: Leveraging the Natural Fit Between Loyalty and Social Media". 4As Jay Chiat Awards for Strategic Excellence. Retrieved March 11, 2013, from

Methods of Investments Essay Example | Topics and Well Written Essays - 750 words

Methods of Investments - Essay Example Money market accounts are a type of savings account, in which money is invested at a high-interest rate, with high restrictions on its withdrawal.A money market account offers a very high rate of interest on the amount deposited. Furthermore, the interest is compounded daily, and paid monthly, which means that the interest amount keeps on increasing based on the compounded interest. This normally pays off the highest, and it is safe due to the fact that most money market banking systems are insured by Federal Deposit Insurance Corporation.There mostly is a high cap on the minimum amount that may be left in a money market account so most banks might not even accept the $1,000 as a deposit amount. Furthermore, there are restrictions on the number of transactions that can be made per month which limits user control, and there are high transaction fees as well. All these things have to be kept in check when a money market account is made.A passbook savings account is one for which all tr ansactions including deposits, withdrawals, and interest, are recorded in a passbook accessible to the account holder. This is updated by the bank on a routine basis.A passbook savings account allows the account holder to observe his banking trends and extract profitable patterns from the records. Also, this account has a higher degree of transaction freedom than a money market account. Thus it is beneficial to those account holders who have a keen interest in the trends and they do not need a monthly statement.

Electron Essay Example | Topics and Well Written Essays - 500 words

Electron - Essay Example In this case, the government took responsibility of oversight, first through the ministry of finance (Thai 12). The ministry possesses the overall responsibility for procurement systems in the public sector, including the responsibility for monitoring the policy’s implementation, particularly regarding public expenditure and facilitation of a proper understanding of the governing documentation service-wide. In discharging its responsibilities, the finance ministry carries out routine investigation of operations or activities of various departments and institutions, as well as maintains a reporting system that contains information relating to contract awards and the governing documentation. Additionally, the government monitored and, when necessary, investigated at its discretion the awards and the implementation of all government contracts to ensure that they are impartially awarded (Thai 12). The government also ensures that the contract was awarded on a basis of merit and that its awarding or termination does not involve irregularity or impropriety. It further ensures that the contract’s implementation conforms to the conditions and terms set out. The contracting officer is charged with advising the awarding of the contract and, where applicable, a variation of government contracts. He also has access to records, books, property and stores belonging to the government. This is true for all premises and property where a government contract is either being executed or in the process of execution. If the contract had been awarded via a sealed bid process, the answer would have been different. This is because the process would have been more competitive and, consequently, the best bid would have won. Sealed bidding is fairer since the providers are not given a chance to appear more efficient or smarter than their competition. This could have happened during the tendering

Ford Case (Marketing) Analysis Essay Example | Topics and Well Written Essays - 1250 words

Ford Case (Marketing) Analysis - Essay Example However, according to Sullivan-Diaz, her father was never interested in services part of the business and it was only a necessary adjunct of the business. The problem starts right from here because Sullivan family has been unable to identify the strong interdependency between product sales and services. Nowadays, marketing products and services are interdependent because of the changing consumers’ buying behaviour. Consumers make the purchase after considering how the services later on, will benefit them. However, at Auto World, a huge difference has been noticed between their efforts to market products and providing services. First, the showroom was built in modern building with latest facilities and ambient whereas, the services section was hidden behind the showroom and its building was old and greasy however, the equipment was latest. Second, services section had sufficient capacity to handle more repair work but the capacity was not being achieved because of the requirements of more mechanics and more focus of the staff towards unit sales. The major difference between marketing products and service operations is that services require the personal contact or face-face meeting. At Auto World, the buyers of new cars were given a warm welcome however, whenever the same customer came for car services, he used to wait for many hours. The major reason is that marketing cars was being considered to be a highly efficient process whereas, service operations were very inefficient and even the service layout was not properly developed. Auto World is offering tangible products and services to the customers, and both these components are contributing to create value for the customers. Therefore, company should give great focus towards both marketing cars and services operations. If the company has been able to introduce used cars after ensuring their full repair and maintenance, then it should be also efficient in its services operations.