MacmidIK Essay Example | Topics and Well Written Essays - 1250 words

MacmidIK - Essay Example B – More will be demanded at lower prices 14. A – Income 15. B – A decrease in the price of a substitute product. 16. B – A technological change in the production of the good 17. C – An increase in the taxes paid by telephone companies 18. B – Inelastic 19. A – Generally results in substantial negative externalities 20. D – A surplus of 600 units 21. C – $20 And 600 units 22. D – using private bargaining when property rights 23. A – eliminate all pollution rights 24. B – changes only when there is change in out put 25. A – real GDP doubles 26. C – Nominal GDP and real GDP both decreases 27. A – Family will need to spend more in order to maintain its standard of living 28. C – Nominal GDP divided by real GDP 29. B – 110 30. C – Couples remodelling their own homes 31. A – 1 and 2 32. D – Stable political system 33. B – Movement from a point inside to a point outside the production possibility curve 34. B – 6 percent 35. B – Cyclical 36. C – Frictional 37. C – Is equal to the total frictional and structural employment 38. D – Actual GDP is greater than potential GDP 39. B – Actual GDP is less than potential GDP 40. A – Every 1 percent that the actual employment exceeds the natural employment rate, a 2 percent GDP gap is created 41. A – 4.0 Percent 42. C – Demand-pull inflation 43. C – Cost push inflation 44. A – Increases by 3% 45. ... B – Real GDP will increase 55. C – 280 billion 56. D – An increase in real interest rates. 57. A – Productivity 58. D – 4 59. C – 3 60. A – Supply increase Short Answers 1. a) Making necessary computation to complete the table below Year 1 Year2 Labour force 95,450 108,250 Employed 90,325 100,830 Unemployed 5,125 7,420 Unemployment rate (10%) 94% 94% Unemployed= Labour force-employed Year 1=95450-90325= 5,125 Persons Year 2= 108,250-100,830=7,420 persons Unemployment rate = number of employed people ? Labour force?100 Year 1 = 90,325?95,450?100 =94% Year 2 = 100,830 ? 108,250?100 =93% b) Possibility of increase in employment and unemployment between year 1 and 2 Based on the above computation, it can be scrutinized that there was an increase in number of employed and unemployed people between the two periods. This is because there is a possibility of having both favourable and unfavourable economic conditions leading to an increase in number of employed and unemployed people (Taylor, 2007). The above assertions may be substantiated by Keynesian theory of economics that holds that a trade off exists between unemployment and inflation, this trade off may be presented using Philips curve (Tucker, 2011), whereby, during favourable economic conditions, inflation decreases while employment increases (Tucker, 2011). On the contrary, during unfavourable economic conditions, inflation rates decrease while unemployment increases (Tucker, 2011).Therefore, based on the above discussion, it is possible to have both increase in employments and unemployment between the two periods. In above connection, an increase in unemployment may be attributed to technological advancement. This is so because most people get laid off as less human labour is needed (Layard,

Main principles of industrial revolution Essay Example | Topics and Well Written Essays - 750 words

Main principles of industrial revolution - Essay Example According to North, "institutions change shapes the way societies evolve through time and hence is the key to understanding historical change"(1990:vii, 3). Poor economic performance is the result of inefficient institutional structures. The difference growth rates among nations are the result of different types of societal rules that nations have. The great progress made by England compared to Spain is the different institutional structure of the two countries. Spain adopted a conquest strategy while England used a commerce strategy. However, there are some who consider North's emphasis on the importance of institutions too naive. According to Donald Snooks, what determines the industrial climate and economic growth is not the institutions but individuals who are capable of making decisions (292). Ideal institutional framework alone cannot achieve success in economic progress. There should be the apt technology for the success of any economic revolution. The Industrial revolution in England was fuelled by great technological change. This may be called the dynamic strategy of technological change. The growth that England showed in the middle ages was slowly losing the impetus by the 16th century and resulted in gradualism. This continued for many more years and the English economy stagnated in the early 1700(Wringley, 1994:32). Only a big push could save the country from financial ruins. Luckily for England a combination of Technological strides coupled with matching strength of institutions came to the rescue of the nation. The commercial change of the industrial transformation was not connected with England alone. Even France was an ideal soil for a change. Certain combination of factors in England made it a possibility. A major chunk of these were technological leaps that England had made. The adequate institutions that England evolved were also a major factor. Transportation in England had the support of the railways and steam engines. Further steam engines reduced human factor in industry. The global markets became accessible due to navigation. England replaced the institution of regulation and encouraged the climate of competition. The central factor in the success of Industrial Revolution was the cheaper method of manufacturing products and cheaper ways of transporting them across the globe. There was adequate institutional support for these activities. The technology strategy replaced the need to conquer others and resulted in the realization that colonies are not necessary for economic growth but countries capable of entering into trade relations. Early in history England realized that economic growth is possible only if individuals worked through market. This realization helped England to form institutions based on laissez-faire policy. The English institutions were the individuals working through market. This resulted in legal system that protected the rights of the individual and private property. The political system gave enterprising individuals the chance to defend their sources of wealth. The educations system provided the skills required for cheaper production. In brief the system followed in Englan d for technological transformation was a system of freely operating market that gave the individual the ability to take decisions. So for the private individual to maximize returns on