Macroeconomics An Overriding Thing - 1016 Words

Macroeconomics has become an overriding thing. The need to promote a healthy economy has been a critical goal for most governments and economists. However this has not been tenable in most cases. The economy can fluctuate but should not go out of control. This means that it has to stay within the expected realms of growth path so that it is capable of avoiding long-drawn recessions. This can occur based on internal mechanism or through help from policy that provide protection from inflation and recession. The economy should be able to respond to such polices without any major structural constraints. In this case, macroeconomics helps in understanding the underlying issues that can help in the realization of such economies. A healthy economy has to be steady and stable over the long-term. Based on this information, this paper explores the underlying issues in macroeconomics, especially with regard to components. II. Background and Explanation Macroeconomics began in the 1930s in response to the Great Depression that occurred in that period. The English economist, John Maynard Keynes, introduced it, thereby leading to the use of the term Keynesianism to refer to macroeconomics (Snowdon Vane 7). According to Keynes, the market is incapable of generating enough savings by itself to support and sustain investment at full employment levels. Therefore, the achievement of this aspect could only occur based on the sporadic sharp increase in spending by the government. Therefore,Show MoreRelatedThe Federal Reserve Bank, And The Coca Cola Company1683 Words   |  7 Pagesan estimated GDP spending at twenty-one point seven percent. Most of these increases in spending in previous years was due not only to the events of September eleven two thousand and one but also do to the recession that began in 2008, as well as things like the bank bailouts. Taxes are another concern that effect the government s spending plans although they have been mostly stable in the previous years due to the government trying to stimulate the economy; there are credible indications that theRead MoreMonetary Policy of Bangladesh1674 Words   |  7 Pageswith the output gap (difference between the actual and the longer run potential output) in view; the policy stance is eased to  provide stimulus at times of slowdown when actual output lags the longer run  potential, and the stance is tightened to slow things down when the economy overheats with actual output running ahead of the sustainable longer run potential. Diagnosing and treating asset price bubbles symptomatic of overheating are major  issues of current debate in monetary p olicy. For developingRead MoreSignificance of Financial Reporting1702 Words   |  7 Pagessystem of financial reporting is the possibility of different accounting treatments being applied to, essentially the same facts. The consequence of that would be different results or financial positions each of which would apparently comply with the overriding requirement to show a true and fair view. However the investors might not get the real picture behind the numbers which put them to a disadvantage and they would not be in a position to see through the techniques used by the management to show theRead MoreZimbabwe Debt Crisis3350 Words   |  14 Pagesmainly due to such myopic, politically motivated decisions. Then the outbreak of the war in the Democratic Republic of Congo (DRC) in August 1998, again had a severe impact on government expenditure. This again is a clear demonstration of politics overriding economics. The government ended up spending as much as $6 billion, which was taxpayer’s money that was spent without being budgeted for. 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The euro has brought economic benefits to the euro-area countries. These include greater macroeconomic stability and resilience as well as more efficient functioning of the single market. The Economic and Monetary Union (EMU) has promoted: * Price stability. Inflation has come down in the euro area from around 4 percent in the early 1990sRead MoreCorporate Governance in Banking: a Conceptual Framework9571 Words   |  39 Pagesgreat deal of empirical research on corporate governance, very little of it concerns the behaviour of owners and managers of banks. In addition, there is no clear theoretical path between governance as a microeconomic concept and regulation as a macroeconomic concept. There is, therefore, little guidance as to the conceptual framework that is suitable to understanding governance in banks. This lack of guidance creates a strong theoretical motive for research on these issues. By defining a conceptualRead MoreThe Impact of the New Wave of Financial Regulation for European Energy Markets10246 Words   |  41 Pagesare used by market participants to make this uncertainty more manageable. A derivative can be deï ¬ ned as ‘‘a risk transfer agreement, the value of which is derived fro m the value of an underlying asset’’ (ISDA, 2011). An energy derivative does two things (Macey, 1996). First, it transforms uncertainty about energy prices into calculable risk. Second, it transfers this risk to a counterparty that has a comparative advantage in bearing it because of an open position or a different risk appetite. 2.2Read MoreHomework11617 Words   |  47 Pagescosts. New operating expenses were greater than the increased throughput. Thus, management was misled by its focus on standard unit costs. 4. Selling Prices. Unfortunately, the market for the firm s products was very competitive. Due to such macroeconomic factors as government programs and foreign grain production, the domestic market was shrinking. Internationally, CI s high unit costs made foreign markets difficult to enter. Consequently, management perceived the marketplace to be mostly out