...ECON 1002 Macroeconomics Suggested answers Tutorial 4 Equilibrium and the Aggregate Expenditures Model In this tutorial we return to Funland (from LA2 in Module 4) and explore the concept of equilibrium with the Aggregate Expenditure model. Please note you will learn this conceptual material by doing it yourself. Copying answers from friends will mean you do not really learn which will then be a big disadvantage for you in the mid-semester test. Suppose that Funland people consume 75 cents for every extra dollar they earn (and conversely save 25 cents for each extra dollar). Assume that autonomous consumption is $200 (i.e. what is spent regardless of income). Assume there is no external sector and no government expenditure yet, so Aggregate Expenditure is just C+I. 1. What is the formula for the consumption function? C = Cauton + ɑ(Y) C = 200 + 0.75Y Assume the Funland Bureau of Statistics employ you as an economist to complete the following table (Table One). They want to model what will happen if there is a planned $100 million of investment injection for that year. Because they know the consumption function they can work out the consumption level at different income levels. Savings can also be calculated because in this simple economy what is not consumed from income Y becomes savings (S). 2. Complete the missing cells in the table. The formula from i. will give you the C numbers. From this you can calculate Aggregate Expenditure You can then deduce S...
Words: 838 - Pages: 4
...Macro Economics Evaluation and Assessment of State Growth Performance of Indian Economy Assignment # 2 Section C3 – Group # 9 Submitted by: AMIT K NAIR FT163010 amitk.pgpm16c@greatlakes.edu.in GUNJAN KAUR JABBAL FT163026 gunjan.pgpm16c@greatlakes.edu.in KUMARESH PASSOUPATHI FT163044 kumaresh.pgpm16c@greatlakes.edu.in PIYUSH MAHAJAN FT163064 piyushm.pgpm16c@greatlakes.edu.in SANKHADEEP GHOSH FT163083 sankhadeep.pgpm16c@greatlakes.edu.in VAIBHAV MALIK FT163099 vaibhavm.pgpm16c@greatlakes.edu.in SHAGUN SRIVASTAVA FT164081 shagun.pgpm16c@greatlakes.edu.in VARUN SODHI FT164097 varuns.pgpm16c@greatlakes.edu.in Investment and Consumption Expenditure People’s savings has gone down by 9.44% from 2010. They are probably spending it, or investing it. The Consumption Pattern of the country has been fairly constant. So, they must be investing it somewhere else. Investments into Capital Creation is falling every year (13.97% fall from 2010). Agrarian and Services Output Agriculture has accounted only for 15 to 18 % of total GDP, declining steadily over the past 3 years. Services grew drastically from 2012-13 to 2013-14, contributing heavily to total Indian GDP ranging from 55% to 58% in last 3 years. This demonstrates a drastic shift from traditional agrarian economy to industry and services sector. 1 Macro Economics Evaluation and Assessment of State Growth...
Words: 639 - Pages: 3
...INTRODUCTION: That assignment consists of two parts. In first part, we will discuss the macro environmental factors that will affect BP (British Petroleum), when they have to consider their future strategic decision in order to regain their market position in the USA. In second part, we will suggest a marketing plan for BP to consider to recover from this ‘‘marketing disaster’’. The disaster is the Gulf of Mexico oil platform (which is the Deepwater Horizon) explosion occurred, millions barrels of oil have been leaked in the region for a few months. That infiltration is the largest environmental disaster in U.S. history. The goal of macro environment analyse is to see that marketing opportunity and threats were given by changes and trends in macro environment. Focusing on them for marketers helps to take decision and modifies their strategies and plans. The marketers wish to know which elements of macro environment affect their planning and how they influence future strategies. We will see the strong point and factors of macro environment which are the social and cultural environment, political and legal environment, economic environment, technology environment and demographic environment. And we will consider the “how these factors influence the decisions.” That assignment begins with the definition of the company which is BP. The company is active in the field of fuel all over the world. And that assignment includes SWOT analyse and...
Words: 3060 - Pages: 13
...Assessment Activity F: Commentary One Semester 2 2015 Weighting: 10% Length: 1000 words Due: 13th April 2015 Final Draft (Assignment box level 1 by close of school) 20th April 2015 Final Submission (Assignment box level 1 by close of school) STATEMENT OF PURPOSE The assessment provides the student with an opportunity to apply knowledge of government economic management policies to the pursuing of economic sustainability This assessment task is broken down into four (4) unit activities to be completed at the end of each unit starting 23rd February 2015 and submitted to Moodle for draft feedback Unit Activities (What are the unit activities) • Introduction (economic objectives) / monetary policy • Fiscal policy • Micro Economic Reform (M.E.R) • Evaluation of the government's policy mix Tasks Your investigation must cover ALL of the following aspects: Week 1: Using economic data as support, outline the past (last 5 years) and current trends in Australia’s GDP Annual Economic Growth and the unemployment rate. Compare the changes in the macroeconomic policy and the achievement of Full Employment over the last 5 years using economic data trends. Introduction What is economic sustainability • briefly outline the main economic objectives of the Australian government (economic growth, full employment and price stability) • state the Australian government target rates for real GDP, unemployment and inflation ...
Words: 452 - Pages: 2
...Introduction to Economics BS1547 Introduction to Economics Macroeconomics Assignment- 1 Neo-Classical and Keynesian “The study of how society, and those in society allocate scarce and hence valuable resources between competing uses can be defined as Economics”(Jones, 2013) which was founded by Adam Smith in 1776. “The field of Economics that deals with the aggregate economy and changes in its level of unemployment, national income, growth rate, GDP, inflation and price level is called Macroeconomics.”(www.investopedia.com) As economics developed two distinct approaches were seen to immerge the Neo Classical which stated that Macroeconomics = ∑Microeconomics and the Keynesian which stated the opposite. Both these approaches are still followed in the managing of the present world Economies. Figure 1. As seen above, Neo classical approach lasted several years before the Great Depression, but was revived once again after the period of stagflation when the Keynesian approach failed to improve the economic condition. The Neo Classists approach influenced by Adam Smith and others with reference to the ‘invisible hand theory’ (Jones, 2013) stated that the “market is best left alone and that it will adjust and clear itself and hence finding its own macro-equilibrium.” (Jones, 2013) Keynes suggested that this is not realistic approach and that “government intervention is needed for the market to reach its macro-equilibrium.” (Jones, 2013) The Neo Classical approach towards Economic production...
Words: 525 - Pages: 3
...Objective of the Assay: Impact of Macro environment forces on the components of the core marketing system. I have defined some objectives in this assay: • To define Macro Environment. • Classification of Marketing Environment • Elements of macro environment • Impact of macro environment on marketing system. Macro- Environment: A factor that influence a company's or product's development but that is outside of the company's control is known as macro environment. The company and all of the other actors operate in a large macro environment of forces that shape opportunities and pose threats to the company is known as macro environment. Six largely uncountable external forces influence an organization’s marketing activities and shape opportunities is known as macro environment Forces. These factors include the economic, demographics, legal, political, and social conditions, technological changes, and natural forces are known as macro environment. Elements of Micro-Environment: Demographic Environment Demography is the study of human populations in terms of size, destiny, location, age, gender race, occupation and other statistics. The demographic environment is of major interest to marketers because it involves people. Economic Environment Marketers require buying power as well as people. The economic environment consists of factors that affect consumers’ purchasing power and spending power/ patterns. Marketers...
Words: 902 - Pages: 4
...ScholarlyScholarly Assignment-MACRO Analysis Research Strategies to be used by my Company For Keynes, the tension between rational calculation and the incalculable future is managed by the nature of humankind and our animal spirits . Keynes had an ambivalentview of uncertainty. He saw in the lack of rational control an undesired but unpreventableeffect of economic decision-making since the indeterminacy of the future is the prerequisitefor all autonomous and innovative rational activities. As Bernstein (1997, p. 229) puts it: ‘uncertainty makes us free.’This freedom to act is accompanied by the need to prepare for the undesired effects of risk-taking. The development of the statistical probabilistic skills to calculate the future contributed to the ‘modern’ response to uncertainty through insurance. Insurance was developed in Britain in the late 17th and early 18th centuries to meet the needs of mercantile capitalists to share the uncertainties of maritime trading. The growth and increasing wealth of the middle classes in the 19th century resulted in the expansion of insurance to protect against house fire and premature death (Evers and Novotny 1987, p. 36) Analyzation of the Macro environment using a PEST analysis The Macro Environment Analysis is traditionally the first step of a strategic analysis; it is sometimes referred to as an external analysis, a pest analysis or a pestle analysis. The purpose of the Macro Environment Analysis is to identify possible opportunities...
Words: 914 - Pages: 4
...Antonio Wilson Unit 2 Assignment MT140: Introduction to Management Kaplan University In this paper and assignment the four contemporary approaches to management will be explained. And the definition of open systems and the outline of internal, competitive, and macro environments of an organization. The contemporary approaches to management are sociotechnical system theory, quantitative management, organizational behavior, and systems theory. Sociotechnical system theory is a theory of management that believes technology merely constrains human action instead of rigidly determining behavioral outcomes. This can build good human relations into the technology workflow. Quantitative management relies on solely technology. The quantitative management approach involves the use of math modeling to find the right solutions to problems. Applied to workplace challenges, going from making decisions during product development to fix employee conflicts. Organizational behavior is like sociotechnical system theory when the focus is on people rather than technology. Organizational behavior is the study and knowledge of how people act in organizations. The goal is to build better relationships by achieving human objectives, organizational objectives, and social objectives. Similar the system theory does not look at individuals but the flow of business as a whole. It focuses on subdivisions within the organization and how it ties in with the big picture, the business. An open...
Words: 430 - Pages: 2
...SYMBIOSIS SCHOOL OF ECONOMICS CONSTITUENT OF SYMBIOSIS INTERNATIONAL UNIVERSITY (Established under Section 3 of the UGC act 1956, by notification No F9-12/2001-U.3 of Government of India) 3rd Floor, SCHC Building, Senapati Bapat Road, Pune – 411004. Tel: 020-25672520, 25675406, 25652444 Ext. 249 Accredited by NAAC with ‘A’ grade SYMBIOSIS SCHOOL OF ECONOMICS CONSTITUENT OF SYMBIOSIS INTERNATIONAL UNIVERSITY (Established under Section 3 of the UGC act 1956, by notification No F9-12/2001-U.3 of Government of India) 3rd Floor, SCHC Building, Senapati Bapat Road, Pune – 411004. Tel: 020-25672520, 25675406, 25652444 Ext. 249 Accredited by NAAC with ‘A’ grade NOTICE Internal Backlog Examination for BSc (Economics) Batch 2011-14 (Sem I-VI) is scheduled as follows: Assignment Collection date | Course Title &Course Code Batch 2011-14 | | Assignment Submission | 2011-14 | | 10-Sep-1411:00 a.m. to 12:30 p.m. | 11-Sep-1411:00 a.m. to 12:30 p.m. | Macro-Economic Theory I (102)Mathematics...
Words: 518 - Pages: 3
...Zoom In Zoom Out Page 1 of 2 Business Management Essay COMPANY: Starbucks Subject; “Discuss the impact macro factors may place upon your chosen organisation in the future (1-5 years) and how the organisation may positively manage this”. When speak from macro and micro perspective we must bear in mind that these are two different phenomenon’s. Micro factors can be described as factors that people and businesses keep in mind when making decisions concerning the allocation of resources, whereas macro factors can be described as the factors that are kept in mind when making decisions regarding not only specific companies but industries as a whole and economies, more over micro environmental factors are the one’s over which the business has control for example price, product and promotion whereas macro environmental factors are the one’s over which the business has no control as such as social, cultural, technological and political factors. Businesses operate in markets keeping in mind changing situations not only of their market conditions but also the trends of the economies that they operate in, so that they can adjust and survive in accordance with new situations because adaptation is a must for a business to survive and prosper otherwise a business might be forced to cease operations and shut down. Starbucks is one of top five(Caribou coffee, Tully’s ,Coffee bean and tea leaf, Peet’s Coffee) businesses in a $11 billion industry. The coffee house industry grew from merely...
Words: 511 - Pages: 3
...|Unit: |4 |Marketing Principles | | |Credit Value: | |15 credits | | |QCF Level 4 | |Unit Code: F/601/0556 | | |Assignment ref: 4/Term2/2012 | |Learning Outcomes: | | | |1 Understand the concept and process of marketing | | | |2 Be able to use the concepts of segmentation, targeting and positioning | | | |3 Understand the individual elements of the extended marketing mix | | | |4 Be able to use the marketing mix in different contexts. | | | | |Learner’s Name: | | | ...
Words: 2332 - Pages: 10
...EXPORT MANAGEMENT ASSIGNMENT 1 EXPORT DEVELOPMENT PLAN Summited by Nguyen Thi Lien Huong MSc International Business Management Student Number: 22045933 Main body word count: 1,665 CONTENTS Introduction………………………………………………………………………1. Business and market environment…………………………………………….1.1. Definition……………………………………………………………….1.2. Understanding the environment of a target market…………………….2. Market segmentation and distribution channels……………………………..2.1. Market segmentation……………………………………………………2.2. Distribution channels………………………………………...................3. Financial issues, Export Practicalities and Technicalities……………………Conclusion………………………………………………………………………….References………………………………………………………………………….. | 344577881011 | INTRODUCTION When national economies are more open and trade is increasing both in volume and geography, exporters should recognize huge potential to develop their business. To achieve success in the international market, the initial step is to understand what is important to consider before implementing export strategy. In that context, this assignment aims to provide basic insights that exporters need to take into account. The assignment consists of three main parts focusing on three topics: * Business and market environment * Market segmentation and distribution channels * Financial issues, export practicalities and technicalities In each part, there will be definitions and explanation about the concepts. The assignment also suggests what...
Words: 2095 - Pages: 9
...written by Ruthie Ackerman and published by Forbes.com, reviews Pepsi’s decision to invest billions into the Chinese market audience. This paper will review the article, identify environmental factors that shape the organization and impact marketing decisions, and discuss how technology plays a role in those decisions. Alternatives to Ackerman’s view of social responsibility to the company’s marketing decisions and activities will be analyzed, along with explanations of how ethical issues can make an impact. The accuracy of the article’s forecasts will be reviewed and further supportive references to conclusions made will be gathered, if necessary. Global and Domestic Factors Several macro-environmental factors shape the PepsiCo Corporation and impact marketing decisions. Demographics, economic climate, ecological and political issues, technology, and cultural concerns all affect where the company is headed desires and the decisions the company makes. Each issue affects the company differently, but when combined together, the environmental factors can wreak havoc on a company’s bottom line if not addressed appropriately. On the other hand, if a company has the ability to recognize these factors, can address them, and be prepared to “think on its feet,” then the factors can be used to the company’s advantage. The Ackerman article discusses PepsiCo’s investment into the Chinese market. When it comes to the environmental factors, Pepsi must adjust its...
Words: 2183 - Pages: 9
...Assignment 5 Valerie Lagana Strayer University Eco550 – Economics for Managers September 5, 2011 Question: Describe the changing economic variables in China that influenced McDonald’s expansion strategies. The main changing economic variables in China that influenced McDonald’s Expansion were the increase in GDP and the economic stimulus package. In 2007, the increase in GDP showed a level of strong jobs in China as well as increase income for the Chinese (Farnham, 2010). This allowed the Chinese to spend more money on eating out at restaurants which gave McDonald’s a great opportunity for expansion. In addition, the Chinese government had a stimulus package after the economy dropped in 2008. The stimulus package included building more highways which allowed the Chinese to be accessible to the drive through window opportunity that McDonalds was able to offer as part of their expansion. Question: What factors led to the Mexican currency crisis and peso devaluation in 1994? The factors that led to the Mexican currency crisis and peso devaluation were the Appreciation of the exchange rate, falling interest rates, and the foreign savings. The appreciation of the exchange rate resulted in a decrease in savings with an increase in investment due to the expansion of credit without any federal regulations (Farnham, 2010). The falling interest rates were a result of the appreciation of the exchange rate attracting private capital via privatization of banks and...
Words: 915 - Pages: 4
...HNC BusinessUnit 4 Marketing Principles Learning outcome 2 Micro & Macro Environment Objectives of presentation • Discover the micro marketing environment (internal) • Discover the macro marketing environment (PEST FACTORS-external) • Explain ‘The Marketing Audit’ and how the elements influence marketing decisions Integrated Marketing Integrated marketing strategies take advantage of a combination of communication tools and media to spread a message such as one-to-one marketing, mass marketing and direct marketing. The strategy is developed to ensure the company will deliver the intended value to those customers through a blend of marketing mix tools. Example of an Integrated Marketing Plan Environmental Analysis Environmental analysis is a vital exercise to complete by any company that will explore and understand the external local, national or international forces that might affect your business. The factors are largely outside the direct control of any company and can sometimes have a negative impact on their plans. Equally this can be very important as it will support the business and marketing strategy allowing the company to take advantage of potential opportunities whilst minimising the potential threats to the company. The Marketing Environment According to Philip Kotler, “A company’s marketing environment consists of the internal factors & forces, which affect the company’s ability to develop & maintain successful...
Words: 601 - Pages: 3
