Microeconomic, Macroeconomic. Regarding our project we are mainly concentrated on Macroeconomic, where it concern itself within market system that operates on large scale. Moving on Macroeconomic is defined as, the study of performance of the national economy and the global economy. In other simple words it attempts to measure, understand how an economy works, perform, and how the performance can be
interrelated patterns. Separation theory of micro and macroeconomics allowed to answer various questions which humanity facing. Macroeconomics – is the section of economic theory, which studies the interaction of systems and the economy as a whole. All events are studied together and not split into the individual elements. The range of issues is studying: • Employment; • Economic growth; • Balance of Trade;
demand and make the global economy out of the depression. The theory of the Keynesian economics is the view in the short run, during recessions, economic output is strongly influenced by aggregate demand. Aggregate demand does not necessarily same with the productive capacity of the economy, view by the Keynesian economics; instead, it is influenced by a households and sometimes behaves erratically, affecting production, employment, and inflation. Keynesian economists often argue that private sector decisions
Any introduction to Macroeconomics starts with JM Keynes. He professed in his book, “The General theory of Employment, Interests and Money” that the governments can play a big role in harnessing the production capacity and generation of employment. The Government formulates the macroeconomic policy with a view to generate employment, raise the living standard of people, counter the inflation, reduce the economic inequality and regulate the foreign exchange levels. These factors have a direct correlation
I. What theory says about Monetary Policy? Regarding the content of the concept of “monetary policy” (Amasomma et al, (2011) it is identified as a vital tool that a government or other monetary authority implements to maintain price and exchange rate stability, it is crucial to achieve a sustainable economic growth and external viability. Monetary policy is addressed to control the growth of monetary aggregates and assists other macroeconomic policy tools to achieve macroeconomic goals of low
The macroeconomic environment of a firm as suggested by Oxelheim, L. and C. Wihlborg., (1987) is constituted by a set of four relative prices; the inflation rates, interest rates, exchange rates and political risk premiums (the premium charged by the company for the rules about the uncertainty of the market game). In any developing economy, it is important to consider these particular macroeconomic variables and how their behavior over time affects the company’s health and ultimately its survival
Maynard Keynes was an economist that criticized the classical view of macroeconomics. In his book the general theory of employment, interest and money (1936) Keynes rejects the classical argument that markets would clear and believed it was unable to explain the causes of the harsh worldwide economic crash or provide sufficient public policy solutions to advocate production and employment. The main objective of Keynes’s theory is the arguments that aggregate demand—measured as the amount of expenditure
Macroeconomic models (AD-AS model, IS/LM model) and their forecasts are used by both government and large corporations to assist in the development and evaluation of economic policy and strategic planning for business ventures. These models can produce successful
parity (IRP) theory states that the difference between the interest rates of two countries is equal to the difference between the spot exchange rate and the forward exchange rate. IRP is an important factor in foreign exchange markets which assumes that there is a relationship among interest rate, spot exchange rate and forward exchange rate. There are two forms of IRP which are the covered interest rate parity and the uncovered interest rate parity. Covered interest rate parity theory states that
changes, news such as crisis, recession, inflation and etc. We also have economic problems and solutions of individuals: what should I scarify in order to by something that more important now? This subject will help us to find out right answers. Economics is commonly segregated into two main parts – macroeconomics and microeconomics. A) MACROECONOMICS Macroeconomics is tied to economy as a whole. There are main aspects of economy like unemployment, inflation, stagnation, and the balance of international