Essays Tagged: "Aggregate demand"
Greenspan's Re-Nomination
enspan, 1996, Speech)During the Summer and Fall of 1995, the economy experienced a strengthening of aggregate demand growth. According to Greenspan, this increase in aggregate demand brought finished ...
Subjects: Social Science Essays > Economics
Current Economics Conditions in the United States.
as on investment spending--has been one of the important factors contributing to rapid increases in aggregate demand that have exceeded even the stepped-up increases in potential supply. Under such ci ... and with the pool of available labor already at an unusually low level, the continued expansion of aggregate demand in excess of the growth in potential supply increasingly threatened to set off grea ...
Subjects: Businesss Research Papers
Do Deflationary Gaps Self-Destruct?
flationary gap. A positive output gap, which means that the economy is operating very fast and that aggregate demand is growing just as fast as inflation, is called an inflationary gap or an overheati ... alled an inflationary gap or an overheating economy.An inflationary gap is a situation in which the aggregate demand (AD) of an economy is at an equilibrium level in excess of the full-employment leve ...
Subjects: Social Science Essays > Economics > Economic History
The extended AD-AS model and the Phillip's curve.
DELIn order to understand the effects of inflation in the long run, lets first analyze the long run aggregate demand (AD) and aggregate supply (AS) curves in the long run through the extended AS-AD mo ... ggregate supply (AS) curves in the long run through the extended AS-AD model.SHORT-RUN AND LONG-RUN AGGREGATE SUPPLYShort RunIt is the period in which nominal wages (and other input prices) remain fix ...
Subjects: Social Science Essays > Economics
Business Cycles.
nt and its growth. A high increase in price level can bring down a nation's output by affecting the aggregate demand. It will lower total spending and increase the unemployment level. Similarly a decr ... Both of these factors also can work in a negative way, with reduced investment greatly diminishing aggregate income, and reduced consumer demand decelerating the amount of investment spending.However ...
Subjects: Social Science Essays > Economics
Using aggregate demand and aggregate supply analysis examine the different effects on the UK economy
a) Decisions by firms based in the UK to relocate abroadAggregate demand is defined as the total amount of demand/expenditures in the economy at any given p ... level. It is measured asAD = C + I + G + (X - M)The letters abbreviate the four major components of aggregate demand. Consumption (C ) is the spending by households on goods and services. Investment ( ... xports minus imports (X - M ) shows the difference between what we sell and what we buy from abroad.Aggregate supply is defined as the total amount of production of goods and services in an economy.If ...
Subjects: Social Science Essays > Economics
Using aggregate demand and aggregate supply analysis examine the different effects on the UK economy
a) Decisions by firms based in the UK to relocate abroadAggregate demand is defined as the total amount of demand/expenditures in the economy at any given p ... level. It is measured asAD = C + I + G + (X - M)The letters abbreviate the four major components of aggregate demand. Consumption (C ) is the spending by households on goods and services. Investment ( ... xports minus imports (X - M ) shows the difference between what we sell and what we buy from abroad.Aggregate supply is defined as the total amount of production of goods and services in an economy.If ...
Subjects: Social Science Essays > Economics
Macroeconomic Comperative Analyisis of Japan and Australia (1970-2000)
economy got into a downwards trend with the stock market crash in 1989. Because of the decrease in aggregate demand, lack of private consumption and business investment due to deflation and over inve ... ns and result of economic growth and decline in these economies.Stucture of Gross Domestic Product: Aggregate DemandPrivate consumption had always been a little less than three fifths of the aggregate ...
Subjects: Businesss Research Papers > Markets & Exchanges
Fiscal vs Monetary
ary and fiscal policy the key macroeconomic policies, allow the Australian government to manipulate aggregate demand in order to achieve their economic objectives. Macroeconomic policies attempt to sm ... o smooth fluctuations in the business cycle in the short to medium term by influencing the level of aggregate demand, as seen in the diagram. Monetary policy is...... Fiscal policy is....These policie ...
Subjects: Social Science Essays > Economics
Macroeconomics: What are the Main Causes of Unemployment in an Economy?
lling to work don't have jobs. It is quite impossible to reach zero unemployment no matter how high aggregate demand is because there is always 'natural unemployment' that would occur in most business ... unemployment caused by frictional, structural and seasonal unemployment. The labor market shows the aggregate demand for and aggregate supply of labour, which is the total demand, and supply of labor ...
Subjects: Social Science Essays > Economics
Monetary and fiscal policy.
to increase it again.This helps to keep the nominal money stock on a specified task and stabilises aggregate demand for output.Taylor RuleThis implies that banks don't follow the monetary target but ... interest rates at which the goods market is in equilibrium- The goods market is in equilibrium when aggregate demand = actual incomeThe LM schedule- Concerns the goods market- Shows different combinat ...
Subjects: Social Science Essays > Economics
Hsc Economic Textbook: Topic 3 Summary
ost important influence on economic growth was the total level of spending in the economy (level of aggregate demand). One of the best ways of understanding this perspective on economic growth is to r ... ding this perspective on economic growth is to review the factors that influence economic growth or aggregate demand, which is calculated by adding its components. Aggregate demand is represented by t ...
Subjects: Social Science Essays > Economics
Australia's rate of economic growth and unemployment
gross domestic production (GDP). The most important factor affecting the rate of economic growth is aggregate demand which is the total expenditure of an economy. It consists of consumption; investmen ... is due to the fact that labour is required in the production of goods and services. If the level of aggregate demand for goods and services in the economy changes, this will be reflected in the demand ...
Subjects: Social Science Essays > Economics > Development Studies
Fiscal and Monetary Policies
and provide insurance against the possibility of deflation.Both fiscal and monetary policies affect aggregate demand. But because discretionary fiscal policy changes in the U.S. are often difficult to ...
Subjects: Social Science Essays > Economics
Wall Street Journal article - Aggregate Demand - Andy Pasztor, "Europe Aims to Make Big Satellites," The Wall Street Journal, June 16, 2005, p. B5.
nition of the PrincipleThe new satellite competition illustrates the determinant of expectations of Aggregate demand. Aggregate demand is the demand for a country's Gross Domestic Product (GDP). GDP i ... c Product (GDP). GDP is comprised of consumption, investment, government spending, and net exports. Aggregate demand as a graphical representation gives a picture of an entire economy, considering bot ...
Subjects: Businesss Research Papers > Markets & Exchanges
Wall Street Journal Article - Monetary Policy - Greg Ip, "Fed Chief Signals Rates Still To Rise," The Wall Street Journal, June 10, 2005, p. A4.
kely continue to increase.DefinitionThis article is an example of monetary policy and its effect on aggregate demand. Aggregate demand was described in full in article #3. Remember, that when an econo ... article #3. Remember, that when an economy edges toward recession, one or all of the components of aggregate demand lie below potential. To find full potential, one must look at the long run aggregat ...
Subjects: Businesss Research Papers > Markets & Exchanges
Economic Growth
isting resources. This leads to other sources of economic growth, including the major components of aggregate Demand (consumption. Investment, net government spending and net exports). Technological c ... erial welfare and living standards.Other Sources of economic growth include the major components of aggregate demand, being denoted by consumption (C0, investment (I), net government spending (G) and ...
Subjects: Social Science Essays > Economics > Development Studies
What are the Causes and policies used to counteract inflation
n within the economy is Demand inflation or otherwise known as Demand pull inflation. This is where aggregate demand exceeds Aggregate supply, causing inflation to occur as supply is not being able to ... ary gap to occur at point cd on the graph.The second type of inflation, cost inflation, occurs when Aggregate Supply falls within an economy, leading inflation to occur. The fall in aggregate supply i ...
Subjects: Social Science Essays > Economics > Development Studies
Using the AD-AS model, explain the possible effects of a sustained appreciation of the local currency on the government's macroeconomic objective.
Assume that initially the economy is at the equilibrium level of output where aggregate demand equal to aggregate supply and this is shown diagrammatically below.Aggregate demand ... on of household due to the cut in their earnings. These three factors would result in a decrease in aggregate demand.In the long term, a decrease in aggregate demand is not desirable because it could ... nagement policy.Expansionary policies such as fiscal and monetary policies indeed can stimulate the aggregate demand but they have destabilizing side effects that may impose more problems to the econo ...
Subjects: Social Science Essays > Economics
Major causes of unemployment, recent unemployment performance, policy options available to the government to achieve a sustained reduction in the level of unemployment in Australian economy
ervices in an economy. This means that if an economy is experiencing low levels of economic growth, aggregate demand will fall, thus decreasing the demand for labour, which will result in an increase ... Microeconomic Reform over a long period of time.Macroeconomic Policy allows the government to alter aggregate demand in the economy through the use of Monetary and Fiscal Policy. As 8 out of the last ...
Subjects: Social Science Essays > Economics > Foreign & International Economics