Aggregate demand

percent” to boost the economy. This is because the persistent decline in crude oil prices leads to lower demand in oil. Consequently, countries only gain low profit from selling oil, which the level of gross domestic product (GDP) result in a dramatic decline. The disadvantages of cutting the interest rate and carry out EMP are the insignificance of economy development and leading of high demand for investment. Since 2015 January, India has cut its interest rate for three times. As a result…

Therefore, ham is a normal good and spam is an inferior good. The demand for a normal good, like ham, will go up. People see an increase in their income as an incentive to buy more preferable goods. The demand for an inferior good, like spam, will decrease when income rises. People usually see that they’re able to pay for the higher price of a normal good compared to an inferior good, especially…

the profit margins so as to appropriately set their prices. The formula for full costing model is (Total Production cost+ Selling and administration cost + markup)/number of units to sell. The pricing model is usually applied when there is a known demand and when there is specific requirement by customers. Full-Cost Price model is a model that has been developed against the modern economics model of Average-Cost-Pricing. In this model, price is set based on the average-cost principle.…

will only affect nominal, rather than real, variables . For instance, an increased money supply might increase prices, but, under mainstream macroeconomics, it would be assumed to change wages and costs by the same amounts such that aggregate supply and aggregate demand, and real purchasing power, remained unchanged . Neutrality of money is almost universally disregarded by microeconomists but is typically accepted, at least in the long term, by most macroeconomists . Despite this, it is…

education level required jobs. Unfortunately, wages are dependent on the aggregate demand and supply dispensability. The Bureau of Labor Statistics (BLS) considers a person to be employed…

needed, which increases the demand for workers resulting to a decrease in unemployment. In addition in the short run an increase in inflation will reduce unemployment, resulting to a trade-off between inflation and unemployment. In addition Pettinger (2011) says “If an economy experienced inflation, then the Central Bank raises interest rates. Higher interest rates will reduce consumer spending and investment leading to lower aggregate demand. This fall in aggregate demand will lead to lower…

Introduction Inflation is defined as the sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer buys fewer goods and services. Accordingly, inflation reflects a drop in the purchase power per unit of money, a loss of real value in the medium of exchange and unit of account within the economy. A major measure of price inflation is the inflation rate, the annualised percentage…

The Melting Pot “The Melting Pot” – the United States nickname, yet we are constantly shunning and shaming those that enter the country as immigrants. Native-born individuals scrutinize the immigrants for stealing the jobs, lowering the wages, and every other negative outcome of the economy. Americans generalize the face of immigrants as either Mexican or Asian; however, the United States receives immigrants from several other places as well. As a matter of fact, immigrants account for a…

THEORETICAL FRAMEWORK AND RESEARCH METHODOLOGY In this chapter, the theoretical framework for the study and its methodology are presented here. Basically, it contains the model specification, model estimation techniques and sources and nature of data. The sample periods of the study span from 1980 to 2013. It is a period of 34 years. 3.1 THEORETICAL FRAMEWORK Remittances are income transfers likely to affect wages and employment both at the household and macroeconomics levels. If leisure is…

economy is to self regulate and promote competition and the role of the state is to protect the public stay removed from the market system, Marx believes that the states should act as a mediator in the markets where the market is dependent on the aggregate household behavior. Keynes argues that a free market without any intervention by the state fails in several aspects such as employment and distribution of wealth. He believes that the state should have some influence on the market, though…