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Macro & Microeconomics Essay

ESSAY (a) Explain why perfectly competitive firms cannot make supernormal profits in the long run but monopolies can. ESSAY (b) Discuss the advantages and disadvantages of free trade. Why do some countries use trade barriers if the advantages of trade are
We can see both the equilibriums – for perfect competition and monopoly, in the figure.The comparison can be seen in the figure above. In perfect competition the price is fixed. Only the output varies and therefore supply curve is horizontal. The equilibrium price for competitive firm is Pc, where MR=MC. But the output level is Qc where MC= AR, meaning supply is equal to demand. For monopoly, the equilibrium position is same, where MR=MC, but the output level is fixed at Qm. The price level
Pages: 10 (2500 words), Essay
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Discuss the advantages and disadvantages of free trade. Why do some countries use trade barriers if the advantages of trade are so great
The equilibrium quantity of goods traded at this point is represented by “Y”. If the country decided to indulge in free trade then SW will become the supply curve and fewer goods will be traded in the market at point “Y1”. The reason why the quantity of goods traded in the market is reduced is because the imported goods are cheaper and local production of goods has reduced and the gap between Y-Y1 is filled by imported goods. This is a point of controversy and economists who are against
Pages: 5 (1250 words), Essay
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Central bank independence and the conduct of monetary policy
The mechanism of the monetary policy is a process with the help of which alterations in the supply of money have an effect on employment, equilibrium of payments, output and inflation as well. For instance, any increase in the supply of money would imply that there would be more availability of money for the people to expend on assets that are financial in nature. As a result, the cost of the financial assets would increase. It is a known fact that there exists an inverse relationship among the
Pages: 5 (1250 words), Essay
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Financial Market Efficiency
Not a very easy task because it requires a lot of money and effort, as the financial statements of any company are not publicly available (Creighton, Gower, & Rihards, 2007). One needs to make a deep research to gather all the information, which is helpful in determining the current prices and getting profitable returns.The strong form of market efficiency does not only have impacts of public information but it also opts for information inside the company that is private information. Strong
Pages: 4 (1000 words), Essay
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Describe and explain two policy issues that should be addressed over the coming years by the Department of Finance Canada and why
A reverse tax would operate something like a guaranteed minimum income – if someone’s taxable income is below a certain threshold (the particular number would have to be negotiated) the reverse tax would kick in, giving money to those people to help compensate for their low income. One of the biggest problems with existing tax structures is the fact that many social help programs, from business expenses to college tuition, are only available in the form of tax deductions. For people who
Pages: 4 (1000 words), Essay
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Australian economy
Given that consumption growth alone is responsible for 1.5% of the growth of the Australian GDP, it serves as an important sector.The GDP also witnessed a boost in investment especially in the mining sector although the government’s new tax on mining was expected to prohibit further growth. The mining industry witnessed a growth in investment of 29% between June 2009 and 2010 which was around 50% more than expected (Pascoe, 2010).The GDP was positively supported by the net exports as the
Pages: 8 (2000 words), Essay
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Global macroeconomic imbalances are the cause of the crisis. (RICHARD PORTES). Critically analyse this assessment you may answer with reference to either global macroeconomic imbalances and the current global crisis, or with specific referenc
Richard has identified the main root and origin of the financial crisis as the world’s macro-economic imbalances which were responsible for bringing about huge inflow of capital across borders. This phenomenon was particularly overwhelming for the sophisticated financial systems present in the United States and the United Kingdom which was consequently responsible for the creation of asset price bubbles. This was also responsible for provoking ‘search for yield’ which with the support of
Pages: 13 (3250 words), Essay
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Choose one product/service of a popular company or any company which is listed on a stock exchange market and write an essay or report
The market structure of Aon Corporation with response to trading of shares in the stock exchange market is a wide one, figured to deliver the best and effective services to its active stock exchange market share buyers and sellers worldwide through sub branches, online, or phone (eTrade) (Wapler, 2003:46). Due to its need to have a structured market globally, it established Global Business Units that help to integrate its corporate culture of work within as well as across borders. What connects
Pages: 6 (1500 words), Essay
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Economic Globalisation is the main reason for an increased income inequality in the world economy as well as high rates of unemployment in industrial countries during the last two decades. Discuss
It is observed that all the factors of production technology, plants, and capital except land can be shifted between the countries but it is the labour that globalizes at a very slow pace (Reich, 1991 cited in Dehesa, 2006, p. Labour mobility between the developing and developed countries has slowed down over the years and this has led to diverged per capita income across countries. This shows that migration surely does not contribute towards the income equality. Anti-globalization sentiments
Pages: 12 (3000 words), Essay
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Principles of Macroeconomics
Budgetary deficits are financed through government borrowings. When government borrowings rise to a high level, the government may have to offer increased interest rates so that sufficient buyers are attracted to buy government debt. Obviously, higher interest rates will tend to retard the economic growth rate.Increasing borrowings year after year will necessitate higher spending on debt-interest. Higher interest burden eats away the productive deployment of the capital necessary for the
Pages: 5 (1250 words), Essay
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WRITING ASSIGNMENT
Additionally, people wanted to buy the same things which caused inflation as a result of increase in demand. High unemployment rates as well as speculations on the prices of oil led to further increase in inflation.The situation worsened as a result of greed. The economy of US is built on credit. Credit is a great tool that should be utilized in an appropriate manner. For instance, credit can be utilized to expand and start a business that will eventually lead to generation of jobs. Credit can
Pages: 4 (1000 words), Essay
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International Labour Markets: Income inequality in the United States
Mobility is higher among the workers with high wages and this leads to larger wage increases compared to those in the low levels. Also based on the social mobility, income earnings would vary across generations due to varied levels of mobility. An example is the difference between a son’s incomes with that of his father. America has higher levels of inequality across different generations when compared to other developed countries. Countries that have higher coefficient in cross sectional
Pages: 7 (1750 words), Essay
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Discuss the rationale for investing in nutrition for the under 5s. Does this lead us to the conclusion that it is not worth investing in education interventions for older children
Apart from retardation, bad health also leads to physically challenged children. This hence makes them reluctant to work thus reducing how they work. This issue in turn makes them fail to bring income to a country and to themselves too (Kogali & Krafft, 2015:3).It also helps in preventing certain illnesses that may affect them in future. An example of the illnesses that are associated with poor early childhood nutrition is obesity. The graph used to measure BMI shows that BMI z scores at
Pages: 4 (1000 words), Essay
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Identify three government market failures and describe their effects. As in past government failures in the world
Unfortunately, the bubble did not continue to inflate, prices plummeted, and many citizens were unable to service their debts. According to Bernstein, the profit motive coerced the actions of the lenders, because it is highly unlikely that they did not foresee such a market failure. It is the duty of government regulatory bodies to enforce regulatory functions to prevent the housing bubble.The Federal Reserve and a myriad of government agencies focused on the financial market have the mandate
Pages: 6 (1500 words), Essay
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Bankers Bonuses a Force for Good or Evil
On a similar note, the banks find it hard not to give its employees the bonuses since they are metaphorically surrounded by bonuses since their stock is money. They use it to trade even in the stock exchange. This goes without a say that, the banks have the ability to extend large sums of money to the employees as bonuses because the money is available. However the question arises whether the government policy through the Bank of England on capping of the bonus and crawling them to 10 years
Pages: 8 (2000 words), Essay
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Final resarch
The income inequality gap is high among the Argentinean population, considering the fact that the lowest 20% of the population in Argentina shares only 5% of the total income in the country, while the highest 20% shares 48.7% of the income in Argentina among themselves. In this respect, the percentage of the population earning low incomes is very high, compared to a very small percent of the population that is earning vey high incomes. The population of the low-income had been growing
Pages: 4 (1000 words), Essay
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Should contries like Greece bear the burden of repairing the Eurozone economy
After the national election in which the newly elected Greek Government revealed that there had been many de facto lies presented to the public regarding the extent of fiscal and monetary deficit in the economy. The revised fiscal deficit of Greece in 2009 showed that the country had 7% more fiscal deficit than the value presented before, which resulted in the global investor groups removing their money from the Greek sovereign bonds1. These conditions ultimately made it necessary for the
Pages: 6 (1500 words), Essay
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International Economic Relations
Similarly, a country is capable of exporting some products even in some industries in which it is a net importer. This implies that there will be a presence of both intraindustry as well as interindustry trade, thus enabling the given country to reap both the benefits of comparative advantage and economies of scale (Murthy 55). This article widely explains the intra-industry theory as it allows a country to reap benefits from both exports and imports by partly engaging in each of these
Pages: 6 (1500 words), Essay
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ECON-2016EL
The state purchases multiplier = 1/ (1 – mpc): we realize that mpc equivalent to 0.75 as given in consumption comparison, so the administration purchases multiplier is 4. This implies that the state purchases must rise by 300/4 = 75 (to a level of 175) for money to rise by 300. In the condition that money supply rises from 1,000 to 1,200 and no change in the price level. Using the same formula in a, the new supply of real balances (M/P) is 600. r is at new equilibrium: 600 = 1000 − 100r
Pages: 9 (2250 words), Essay
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The Performance of the U.S. Economy Today
This resulted in the increase of trade deficit. The FED justified and explained that the labor and the market condition of the economy are improving as compared to the previous years.Although the number of investors increased during the period of recession but the amount of investment by the investors are decreasing with the due course of time. Therefore the level of investment failed to contribute towards the growth of the economy.The consumer spending is mainly measured in terms of the
Pages: 4 (1000 words), Essay
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