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Macroeconomics Essay Topics & Paper Examples

Fdi and Its Impact on Host Country

Balance of payment Transaction between one specific country and all other countries in a specified time period is balance of payment. It compares the cash inflow and cash outflow. For a healthy economy there should be balance in cash inflow and outflow. FDI has a vital role in maintaining balance of payment. With the introduction of FDI there is increase in the production and export for a host country. And increasing export increases cash inflow to the host country. Again when host country makes payment to other country or imports goods, there is cash outflow. So this whole process makes balance of payment. Balance of payment is one factor that helps develop the economy of a country and FDI has…

Balance of Payments

1. Define the balance of payments. Answer: The balance of payments (BOP) can be defined as the statistical record of a country’s international transactions over a certain period of time presented in the form of double-entry bookkeeping. 2. Why would it be useful to examine a country’s balance of payments data? Answer: It would be useful to examine a country’s BOP for at least two reasons. First, BOP provides detailed information about the supply and demand of the country’s currency. Second, BOP data can be used to evaluate the performance of the country in international economic competition. For example, if a country is experiencing perennial BOP deficits, it may signal that the country’s industries lack competitiveness. 3. The United States…

Brazil Macroeconomics

The country of choice is Brazil for the following reasons: it is a booming economy, which provides some stark contrast with the stagnation and ever-mentioned phrase ‘double-dip recession’ which now commonly used in the West. Macroeconomics is concerned with the study of aggregate economy, which embodies all nationally relevant economic indicators. The common indicators are the unemployment rate, the rate of inflation, the GDP per capita, economic growth, the economic cycle, and the labor force. Since 2003, Brazil’s economy has been growing steadily. It has been improving its macroeconomic stability despite a small crisis in 2008 which saw its growth rate decline to 2.6%. In 2010 it grew by 7.6% amid renewed confidence from foreign investors. Part of the reason…

Principles of Macroeconomics

An increase of government purchases occurs after a rise in aggregate output and employment. This tends to stimulate the economy, people then tend to buy more and save less. Therefore, it results to a higher importation than exportation, known as the trade deficit. The budget deficit increases the external deficits because the exports do not proportionately increase to counterweight increase imports. This explains that a large budget deficit raises domestic interest rates and the exchange rate. With a higher exchange rate the domestic products becomes more expensive and foreign goods cheaper. Hence, the import increases while export decreases. Resulting, the trade deficit to be enlarged. Consequently, to help drive the trade and current account of the balance of payments into…

Budget Formulation and Implementation in Zambia

What problems would the minister of finance encounter in the process of budget formulation and implementation in Zambia? The national annual budget is a document containing various government activities or work programmes expressed in monetary form. Thus, the budget is an important economic policy tool for macroeconomic management and resource allocation. It provides a comprehensive statement of the nation’s economic priorities. Accordingly, the budget formulation process has four major dimensions namely (i)Setting up the fiscal targets and the level of expenditures compatible with these targets. This is the objective of preparing the macro-economic framework. (ii)Formulating expenditure policies. (iii)Allocating resources in conformity with both policies and fiscal targets. This is the main objective of the core processes of budget preparation. (iv)Addressing…

Remittence Income in Nepal

Introduction Remittance in developing countries has become a lifeline for economic development. By remittance we mean sending income in terms of money or goods in home by the migrants or workers who have their earnings outside their home country. Today due to the establishment of different agencies like Western Union, International Money Express (IME) etc, in several district headquarters of the country, the remittance flows has become popular for transferring cash or money in time to the recipients. However, it is difficult to calculate the exact size of remittance flows in Nepal due to the emergence of unofficial channels even though it has recorded in balance of payments account. (Ratha 2005). Remittance inflow has been growing substantially in recent years…

Spain’s Financial Crisis

Spain started facing economic troubles since 2008 global crisis. Financial crisis caused a huge crash in the property market and significant losses at its banks. These days Spain’s citizens take part in polls in Galicia and Basque regions. Galicia’s PM Mariano Rajoy lost part of national support due to his austerity measures. Basque country’s Socialist Party met opposite influence from Basque Nationalist Party. Unemployment rate in Spain grew to 25% in some regions like Galicia since the crisis began. Spain has already asked for some contribution from Swiss banks. They received 100 billion euro for covering its financial sector. (2012, SPANISH PM MARIANO RAJOY FACES KEY VOTE IN GALICIA) Spain’s economy grew before 2008; then country faced the recession. When…

Classical vs. Keynsian Economics

There are several significant factors that differentiate Classical from Keynesian economics. Classical economics stays true to the laissez-faire concept of no government mediation in businesses with the assumption that the economy will work itself out. Keynesian economics, on the other hand, revolves around deficit spending and the belief that essentially “in the long run, we’re all going to die”. Both schools of economics take a different stance on the behavior of consumers, fiscal policy, and government spending. Classical economists, in essence, monitor what is currently transpiring in the economy. They believe that the economy is stable and self-sustaining because in the long run, the market supposedly automatically adjusts to “booms” and “busts”. This principle is heavily influenced by the epoch…

Impact of Public Debt Burden on Economic Growth of Bangladesh

Abstract Bangladesh is relying heavily on public debt to meet the budget deficit since its independence. In this paper, the objective is to find out whether the government of Bangladesh is excessively borrowing from the public sources and thus negatively affecting the economy of the country. For this purpose GDP growth rate (GDP), manufacturing sector growth rate (MANF), investment as percentage of GDP (INV) and Export as percentage of GDP (EXP) have been selected for judging the impact of public debt burden (DB) on these variables. The study period is 1980-81 to 2011-12. Augmented Dickey-Fuller test has been used to diagnose whether the time series data are non-stationary. Granger Causality test has been performed to identify whether DB can be…

Global recession and its impact on Pakistan economy

Abstract There has been speculation that American would lead global recession and it could impact the global economy. IMF also predicted that in 2008 global growth would fall from 4.9 percent to 4.0 percent. US economy suffered thousands of layoffs and the biggest retail sales dip on record. Strong economies as that of UK, Germany, France and the new emerging one’s like China and India also fell pray to this recession. Rising prices of oil and different commodities along with the credit crunch majorly contributed to the recent turmoil. The crisis of the sub-prime mortgage market also played its part. The impact of this slowdown on the developing countries might not be as severe on the developing countries as to…

Key Objectives of an Organization

Task 1A. Identify the mission, values and key objectives of an organization of your choice and assess the influence of stakeholders The Body Shop is a public limited company they mainly specialize in beauty products, however they are very much different compared to regular make up brands such as DIOR, SHU UMERA and so on, they are different in a way that they use natural products and they are against animal cruelty. They use plants resources wisely. The body shop is different because of their values. Ms Dame Anita roddick, was a human rights activist and the founder of the body shop. AGAINST ANIMAL TESTING Every one of the body shops products is animal cruelty free and vegetarian. they were…

Mundell Fleming Model

In this essay I will be discussing the way in which free capital flows can cause constraints on monetary policies. I will be looking at the balance of payments and how when it is applied to the Keynesian IS/LM model produces the Mundell – Fleming model. The Mundell – Fleming model shows the relationship between exchange rates and national income. Additionally, to further investigate this situation I will be looking into the ways in which monetary policies behave according to various exchange rate schemes, namely fixed and floating exchange rates. The balance of payments consists of the current account and the capital account. In theory, these two accounts should balance. The current account concerns the imports and exports of goods…

What is economics?

The true definition of the term economics has varied over time, and this has been as a result of the dynamic change of scholar views over time. As common with many other studies, economics also does not have a standard definition but different scholars do give a similar definition. Schenk (1997) states that “Economics is the social science that examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants,” (P 1). It can be established from the above definition that economics is both a science and an art. It is a science in that it follows principles and theories that can be proved through scientific methods. It is also an art in that…

Learning Team Deliverable

Measuring Domestic Output and National Income – Ch. 24 Topics comfortable Kris is comfortable with the concept of gross domestic product (GDP) as it is the dollar value of goods and services in a country during a set period. Walter is comfortable with the GDP concept and understands that is the economic thermometer of the country’s current financial status. Topics Struggle Kris still has to wrap his head around nominal GDP and real GDP when it comes to the GDP Price Index. So calculating real GDP is dividing nominal GDP by the price index. What is the difference between real GDP and nominal GDP? Walter also struggles with the concept of nominal GDP, and how it interacts with inflation. If…

First Draft of Fundamentals of Macroeconomics Paper

There are a lot issues that actually affect our economy, such acts as gross domestic product, nominal GDP, real GDP, inflation rate, unemployment rate, and as well as interest rates. These areas actually has massive power regarding the way we purchase groceries, if there will be a large amounts of layoffs to workers, and decrease in taxes. Gross Domestic Product is defined as the market value of services and goods that are made in the country in one year. This is an indication of the normal living situation in a country. On the contrary, real GDP is a nation’s total output of goods and services adjusted for price changes. Nominal GDP is the gross domestic product without inflation adjustments. Unemployment…

Diff between economics vs managerial economics

1 The traditional Economics has both micro and macro aspects whereas Managerial Economics is essentially micro in character. 2. Economics is both positive and normative science but the Managerial Economics is essentially normative in nature. 3. Economics deals mainly with the theoretical aspect only whereas Managerial Economics deals with the practical aspect. 4. Managerial Economics studies the activities of an individual firm or unit. Its analysis of problems is micro in nature, whereas Economics analyzes problems both from micro and macro point of views. 5. Economics studies human behaviour on the basis of certain assumptions but these assumptions sometimes do not hold good in Managerial Economics as it concerns mainly with practical problems. 6. Under Economics we study only the…

Minimum Wage Increase Essay

Most people would agree that raising the minimum wage sounds like a good idea, but arguments arise concerning if this increase would benefit the economy. Jared Bernstein believes that a minimum wage increase would positively affect the American economy. He argues that the economy is driven by consumer spending and low­income workers are very likely to spend their extra earned money. On the contrary, Douglas Holtz­Eakin strives to make the point that raising the minimum wage would not be beneficial to the economy. He argues that there would be no reduction in poverty because only a small percent of minimum wage workers are in poverty, while most are unemployed. An examination of raising the minimum wage will reveal why it…

Wk 6 homework solutions

Explain how built-in (or automatic) stabilizers work. What are the differences between proportional, progressive, and regressive tax systems as they relate to an economy’s built-in stability? Answer In a phrase, “net tax revenues vary directly with GDP. ” When GDP is rising, so are tax collections, both income taxes and sales taxes. At the same time, government payouts—transfer payments such as unemployment compensation and welfare—are decreasing. Since net taxes are taxes less transfer payments, net taxes definitely rise with GDP, which dampens the rise in GDP. On the other hand, when GDP drops in a recession, tax collections slow down or actually diminish while transfer payments rise quickly. Thus, net taxes decrease along with GDP, which softens the decline in…

Week 6 Homework Solutions

In a phrase, “net tax revenues vary directly with GDP. ” When GDP is rising, so are tax collections, both income taxes and sales taxes. At the same time, government payouts—transfer payments such as unemployment compensation and welfare—are decreasing. Since net taxes are taxes less transfer payments, net taxes definitely rise with GDP, which dampens the rise in GDP. On the other hand, when GDP drops in a recession, tax collections slow down or actually diminish while transfer payments rise quickly. Thus, net taxes decrease along with GDP, which softens the decline in GDP. A progressive tax system would have the most stabilizing effect of the three tax systems and the regressive tax would have the least built-in stability. A…

Zimbabwe’s present economy

Introduction: Zimbabwe is facing a huge economic crisis that is worsening living standards by the day and a decline in industrial growth. Unemployment is now one of the highest in the world, running at 50% against an annual population growth of 3%, mainly because of inadequate sustainable job creation activities in the market. The rampant unemployment has given rise to the worsening abject poverty, rising crime levels, falling quality of life and standards of living, as well as general delinquency. Close to 65% of the population is considered poor according to the latest poverty assessment. The country is facing near bankruptcy. The problem is Government’s huge borrowings where much of the money is used for recurrent expenditures to meet the…

Major causes of unemployment

“Outline the major causes of unemployment and social consequences of unemployment for the Australian economy”. There are a number of causes of unemployment, which ultimately result in both positive and negative consequences for Australias economy. These causes are outlined as follows. Economic growth is possibly the most influential factor causing unemployment. The demand for labour is a derived demand, meaning that it is determined by the level of demand for goods and services 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 in unemployment. resulted in a strong decline in unemployment (stimulus). Australias unemployment rate is currently…

Voluntary Unemployment

Throughout the history of the United States immigration has played a big role. In fact, the birth of the US came about because of Europeans that immigrated here for religious freedom. From those small settlements came towns and cities, built by immigrants. But not all migrated here for religious freedom. Many came on wishes for a better life or to pursue business deals. As early as 1610, Italian craftsmen were brought here to by the Virginia Colony to start the glass trade. So regardless of their drive, people have immigrated here since the beginning of the history of the United States and still continue to. Americans encouraged relatively free and open immigration during the eighteenth and early nineteenth centuries, and…

Pestle Analysis Turkey

The Turkish government is made up of democratically elected representatives of the people divided into several ruling bodies. In September 2010, a referendum on constitutional reform backed amendments to increase the control of parliament over the army and the judiciary. Turkey is a strong proponent of liberal trade and investment policies. The European Union (EU) accession negotiations have required the country to increase the role of the private sector in the economy, enhance the financial sector’s efficiency and resiliency, and strengthen the social security system. However, the country faces challenge from Kurdish militants, and relations with Iran, Syria, Israel, and Cyprus are precarious. In addition, tensions between the ruling Justice and Development Party (Adalet ve Kalkinma Partisi [AKP]) and the…

Foreign Direct Investment

Case Discussion Questions: 1. Why, historically, has the level of FDI in Japan been so low? The relatively low FDI stock in Japan is partly the result of a history of official inhibitions on FDI. In some industries, inward FDI penetration, as measured by the share of employment accounted for by foreign affiliates, in Japan in fact is on par with the United States. However, a large number of “sanctuaries” with almost no foreign involvement remain, so that FDI penetration overall is still very low. While to some extent, this can be explained by Japan’s relatively isolated geographic location, historical factors play an important role. Throughout the centuries and until quite recently, Japan’s rulers have viewed foreign involvement in the…

Factors Affecting Marketing

INTRODUCTION A Business principally is the organized effort by individuals in an organization to produce goods and services and to sell these goods and services in a market place to earn a good profit margin. The operating environment for all organizations whether they are commercial, charitable, governmental, or in the public sector more generally, is never static and seldom entirely predictable, and can therefore profoundly affect a company’s course of action. An organization can influence the various environmental forces acting on it. COMPONENTS OF THE MARKETING ENVIRONMENT The Internal Environment concerns the resources, processes and policies an organization manages in order to achieve its goals. These elements can be influenced directly by an organization. The External Environment consists of the…

Business and the Economic Environment

Identify the impact of government spending on a selected businessP4 Explain how both fiscal and monetary policy decisions have affected a selected businessP5 Describe the impact of international factors on a selected business M1 Analyse the implications of government policies for a selected businessM2 Analyse the effects of fiscal and monetary policies for a selected business in terms of the market it operates inM3 Assess the impact of changes in the global and European business environment on a selected businessD1 Evaluate the impact of changes in the economic environment on a selected businessD2 Suggest and justify elements of fiscal and monetary policies that would help a selected business achieve its objectives Learner declaration I certify that the work submitted for…

Macroeconomics Assignment

Refer to the sets of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves. Use the graphs to explain the process and steps by which each of the following economic scenarios will shift the economy from one long-run macroeconomic equilibrium to another equilibrium. Under each scenario, elaborate the short-run and long-run effects of the shifts in the aggregate demand and aggregate supply curves on the aggregate price level and aggregate output (real GDP). Suppose the household wealth decreases due to a decline in the stock market asset prices (See the set of graphs below and pay attention to the 3-stage shifts in graphs). Answer: In graph one the decline in the stock market asset price causes the AD…

What economics is

What economics is and how you may use economics in your future career and/or your daily life? After World War II, economy is increasingly becoming the focus of national competition in the world. Furthermore, economics as a new breach of human sciences is applied widely in human daily life as well. For example, almost everyone has to consider price, tax, money and welfare in real life. It can be seen from that economics play a significant role in human life. This essay will discuss what is economics and analyses how to use economics in my daily life from economics knowledge, economics logic skill and economic analysis skill three aspects. Economics is a new subject in human sciences and the history…

Business Environment

Executive Summary This report provides an overall analysis on the types of organizations and their functions, performance of Superdry limited, market economies, international trade and how UK businesses are effected by the emerging market like BRIC countries. This report comprises 3 major tasks which includes explanation of the types of organizations and their nature. Organizations are mainly divided into 2 categories they are public organizations run under government e.g. public limited companies (plc) and private organizations operated by the private individual’s e.g. sole trader. People who are interested in the operations of the organizations are known as stakeholders e.g. shareholders, employees, customers, competitors etc. It a responsibility of the organization to fulfill their needs and interest if they want to run…

Structural unemployment

Is structural unemployment something macroeconomic policymakers should be concerned about? How does it differ from cyclical unemployment? Structural unemployment is categorically something that should be considered heavily by macroeconomic policymakers as the ramifications can last for decades and may require drastic actions to readdress the situation. (Structural unemployment, 2014) If the closing of the Geelong Ford Factory is taken as an example we can see that this will have an immense impact on structural unemployment rates for the area. With the plant currently employing over 1,500 staff, the layoffs in 2016 will see 1,200 workers lose their jobs. Unfortunately the unemployment doesn’t end there with a butterfly effect expected to branch out to other industries, such as hospitality, that relied…