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  • Valuable Indicators Of The Future Aggregate Demand
    914 words
    To analyze an economy, certain statistics can be used to predict the economy's future. This is important because it helps prepare people for prosperity or hard times. Certain indicators can be used to determine the future of aggregate demand and others can be used to determine aggregate supply. Using eight aggregate demand indicators and four aggregate supply indicators we developed a prediction for the economy in the near future. Changes in aggregate demand are reflected in changes of GDP. To f...
  • Increase In Aggregate Demand
    873 words
    Actions of the Government and The Increase in Prices The United States economy is currently producing at a level of full employment in long-run equilibrium. The government then decides to increase taxes and to reduce government spending in an effort to balance the budget. The results of the actions taken by the government is the decrease of real GDP. When taxes are increased that the amount of disposable income that is available to consumers is lowered. This lowered level of disposable income le...
  • Private Business Investment Over The Coming Months
    703 words
    The Federal Open Market Committee (FOMC) of the Federal Reserve System cut the interest rates by % in order to have a stimulating effect on the US economy. The following essay will uncover the Feds motives in a question answer form. In the language of your textbook, is the discussion related mostly to aggregate demand or aggregate supply weaknesses? It is apparent that because the main issue was slugging consumer spending (which constitutes a larger part of the GDP), the weakness can be attribut...
  • Increase In Investment Demand
    1,571 words
    a) Explain the operation of the Keynesian multiplier The easiest way to explain the way in which the multiplier works according to Keynes is to construct a simple model. This model will have two particular simplifying features, in that it will focus exclusively on the demand side of the economy, and it will not include either government activity or the foreign sector. In order to construct this model, we will assume that all prices and wages are fixed within the economy, and that there are unemp...
  • Increase In Aggregate Demand
    402 words
    Right, so you " re having an economic recession / slowdown / slump or whichever way you want to call it. And when people are expecting a fall in wages or retrenchment, they aren't gonna spend much. On the contrary, they had better save for the rainy days. As a result, consumer spending falls and when that happens, firms are going to suffer as revenue and profits decreases. They are hence left with no alternatives but to decrease wages or start laying off people. At the same time, they'd have to ...
  • Increase In Average Unemployment Rates
    9,655 words
    Macro-economics Most of the nations of the world today have a free economy. A free economy is one which operates automatically. However, this automatic regulation of the economy is actually achieved by the price level. Price level can be defined as the weighted average of all the final goods and services produced in an economy. A healthy economy is characterized by a stable price level. Fluctuations in price level affect the economy's real domestic output (RDO), unemployment and its growth. A hi...

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