Aggregate Demand/Supply and Full Employment
Employment level in any country is dependent upon important economic factors or elements including production, demand, supply, consumption, inflation etc. Employment can never be increased or decreased without it producing some effect on these economic factors. In their words, changes in these factors are what lead to increase or decrease in employment level. For example in any country we cannot expect to increase employment level without taking into account production of goods and services, demand for those goods and supply of the same.

When employment level in the country is low and the government wants to achieve full employment, it is important to study the economic factors of aggregate demand and supply as they play the most crucial role in determining the level of employment in a country. Aggregate demand is the sum total of demand for goods and services in a country. In any country, there…...

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References

Aggregate demand and supply, Economics Glossary: Retrieved online (12th July 2004) at http://www.bized.ac.uk/virtual/economy/library/glossary/

Full employment, Retrieved online (12th July 2004) at  http://www.revisionguru.co.uk/economics/unemp6.htm

Question 4: Please define the oversimplified multiplier and use your knowledge of the concept to answer the following question. Suppose that GDP is currently $25,000 and the marginal propensity to consume is.50. If autonomous investment increases by $5,000, what will GDP be in the new equilibrium? Assume the oversimplified multiplier is accurate.

Any change in a component of aggregate demand will result in a larger change in equilibrium GDP, called the oversimplified multiplier. The equation would be: 1/1-.50=2.

This means that the oversimplified multiplier is 2, so instead of an increase of $25,000+5,000=30,000, the GDP will be $30,000, as the extra $5,000 should be multiplied by 2.

Question 5: Please describe the concept of investment spending, as well as what will happen to the aggregate demand curve if investment spending is increased autonomously. Also provide an example of spending that a macroeconomist would consider "investment spending."

Investment spending refers to the amount that firms…...

Graph/Table Which Must Also e Included in the Paper:
Explain the difference between personal income and disposable income. How can personal income increase by a lower amount than disposable income?

Personal income is income received by individuals from all possible sources. This includes wages, and income from dividends paid on investments. The largest component of total income is wages and salaries, a figure that can be estimated using payrolls and earnings data from the employment report. eyond that, there are many other categories of income, including rental income, government subsidy payments, interest income, and dividend income. Personal income is a decent indicator of future consumer demand, but it is not perfect. Recessions usually occur when consumers stop spending, which then drives down income growth. Looking solely at income growth, one may therefore miss the turning point when consumers stop spending. Like real GDP per capita, real disposable income is a measure…...

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Bibliography

Henry Hazlitt. Economics in One Lesson. Three Rivers Press; 1983.

James Gwartney. Economics: Private and Public Choice. HBJ College & School Division; 2002.

James Buchanan. The Calculus of Consent. Liberty Fund; 1999.

Kenneth Arrow. Social Choice and Individual Values. Yale University Press; 1970.

Introduction to Economics and Global Capitalism The idea that minimum wage, even though it has risen, has not kept pace with real wages, according to the U.S. Senate Committee on Health, Education, Labor and Pensions (2013). The issue of course is one of inflation. So if Sen. Harkin wants to grow the middle class, which he calls the backbone of the economy, he should simply get on the Fed to stop printing trillions and increasing the money supply so that everyone’s dollars are devalued. No one’s wages are keeping track with the rate of inflation, and while raising minimum wage might help to increase aggregate demand, it would undoubtedly also lead to more unemployment as businesses struggle to maintain margins while passing on the cost of hire wages to consumers. Lowering the minimum wage or abolishing it altogether would actually do more to help reduce unemployment, as it would take off…...

Demand for Money
Money in economics terms can be defined by holding cash or non-interest bearing bank accounts. Since these holdings are less advantages than interest bearing accounts or some form of investment, there has to be some motivation to keep cash or completely liquid assets. There are a range of different motivations that can be used to describe these behaviors. However, most of them use liquidity in one form or another. For example, it is necessary to have liquid assets to make purchases or pay bills for example. So if an individual gets their paycheck they may deposit a portion of the check into some form of investment account, while keeping a portion of it liquid to cover their monthly living expenses.

An individual may also move money to a liquid account if they are planning to make a purchase in the short-term. The demand for holding money can be an…...

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Works Cited

Charusheela, S., & Danby, C. (1998). Macro Notes 3: Money Demand. Retrieved from Washington University:  http://faculty.washington.edu/danby/notes/notes12.html 

Davis, B., Karemera, D., & Whitesides, L. (2013). The intertemporal stability of the U.S. money demand function: new evidence from switching regressions. Applied Economics Letters, 581-586.

Dobnik, F. (2013). Long-run money demand in OECD countries: what role do common factors play? Empirical Economics, 89-113.

Federal Reserve Bank of St. Louis. (2014). M1 Money Stock. Retrieved from Economic Research:  http://research.stlouisfed.org/fred2 /series/M1#

Inflation is also one of the few economic concepts that is generally understood and watched by the lay public because when the general level of prices rises, people's wages can buy less and less of the goods and services that they need. Thus inflation can thus also be seen as a devaluation of the purchasing power of money. The inflation rate is an annualized rate that designates the percentage change over time in the general price index of an economy. (in the United States, this general price index is the Consumer Price Index.)
Aggregate demand is an important concept within macroeconomic theory. It designates the total demand within an economy for both services and goods at any given point of time and as assessed at a specific price level. This concept is also designated as the effective demand and can be seen as the total demand for the gross domestic…...

aggregate expenditure model to explain the impact of the housing boom on investment and consumption spending.
In order to determine the relation between the housing boom and the rise of prices, which are probably caused by greater demand in the housing sector, all factors which may produce shifts in the production function must be analyzed. The model proposed by Keynes suggests that each monetary unit spent on something must be somebody's income. Therefore, the housing boom, which creates new jobs, not only in the construction industry, but also in related areas, such as the production of wood or steel, is bound to produce a corresponding rise in consumption demand, as a result of increased spending. A similar effect is incurred upon investment demand.

Consumption demand goes up and down with peoples' income. The relation is simple to grasp: the more money people have, the more they'll be spending. Should income increase,…...

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Bibliography:

1 Jascot, John A. "Chapter 9: Aggregate Expenditure: Comsumption, Investment,

Government Purchases And Net Exports"

http://webster.comment.edu/faculty/~jascot/chapt9.pdf

2. Jascot, John A. "Chapter 10: Aggregate Expenditure and Aggregate Demand"

Thus it was confidence ebbed that had ebbed actual income. The Hiscox Wealth eview of 2009 found: "The recession has left its mark on the psyche of the Working Wealthy with a lack of confidence impacting their perceptions of wealth and appetite for risk. Whilst two in five (41%) say the recession has not had an impact on the amount of money they have to spend, almost an equal number (44%) say they are fearful of the future" (PN Newswire, 2009). But, observed Vanity Fair reporter tartly: "Most 60-year-old ex-Lehman Brothers bankers likely squirreled away enough to at least scrape by on a couple of million a year" (Shnayerson 2009, p.3). If they did cut back, it was in relatively minor ways: "Why should I pay $250,000 for a private plane," said one man to the magazine "when I can pay $20,000 to fly commercial first class" (Shnayerson 2009,…...

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References

Beattie, Keith. (2009). Industries that thrive on recession. Investopedia.

Retrieved December 10, 2009 at  http://www.investopedia.com/articles/stocks/08/industries-thrive-on-recession.asp?viewed=1 

Besharov, D., & Call, D. (2009). Income transfers alone won't eradicate poverty.

Policy Studies Journal, 37(4), 599-631. Retrieved December 10, 2009, from ABI/INFORM Global. (Document ID: 1905094061).

This creates a need to plan for the resources needed at any given time. This includes that there is a need to plan for the human resources necessary. This would be one of the needs of McDonald's, with restaurants needing to supply the human resources needed to meet consumer demand at all times. This includes all times of all days. This would be different for Dell, since human resources are needed to meet overall demand, but not on an ongoing basis. For example, a decreased amount of human resources on a given day would not limit the ability of Dell to meet production demand, since the decrease could be noted and action taken. This would allow overall demand to be met. In contrast, a decreased amount of human resources even for a short time would limit the ability of McDonald's to meet ongoing demand.
Another issue for service-oriented firms is…...

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References

Schermerhorn, J.R. (1989). Management for Productivity. New York: John Wiley & Sons.

Stevenson, W.J. (2005). Operations Management. New York: McGraw-Hill.

From a short-run perspective, it would seem to be in the interest of the 'average' American worker to support limits upon immigration, given this will raise his or her level of wages and improve his or her employment prospects. On the other hand, America has always been a nation of immigrants, many of whom have created new businesses and infused the nation with new ideas. Increased immigration can thus generate greater long-term productivity, growth, and expanded opportunities for all individuals, regardless of where they were born. Immigrants also come to the United States with a desire to command higher wages and improved working conditions and although they may accept lesser conditions initially, once they gain a foothold in America's economy, they are more likely to demand change and better wages and worker's rights. "Immigration has been an important source of economic and social vitality for the United States" even while…...

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References

Farm labor: The adverse effect wage rate (AEWR). (2007, May). Congressional Research

Service. Retrieved February 10, 2010 at  https://www.policyarchive.org/handle/10207/2396 

Trade and immigration. (2010). The CATO Institute. Retrieved February 10, 2010 at  http://www.cato.org/trade-immigration

Demand for Money
The international community is currently facing the most severe crisis since the Great Depression of 1929 -- 1933. It started within the American real estate sector and soon expanded to the rest of the sectors, as well as to the rest of the global economies.

The causes and impacts of the crisis have often been discussed in the media and within the specialized literature, and the discussion is far from over. Still, this approach to the crisis is more descriptive and reflective. At this stage nonetheless, it is necessary to implement a proactive approach through which to promote solutions to overcoming the crisis.

Governments across the globe have each developed and implemented their own solutions to the crisis, ranging primarily from injecting capitals in the troubled industry sectors and companies, to efforts aimed at reducing federal costs. In the completion of these efforts, a crucial role is played by money,…...

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References:

Bae, Y., De Jong, R.M., 2005, Money demand function estimation by non-linear conintegration, Ohio State University,   last accessed on January 17, 2012http://www.imf.org/external/pubs/ft/wp/1999/wp9964.pdf 

Balnaves, M., Caputi, P., 2001, Introduction to quantitative research methods: an investigative approach, SAGE

Barth, R.C., Hemphill, W.L., Aganina, I., 2000, Financial programming and policy: the case of Turkey, Vol. 1, International Monetary Fund

Canova, L., 2006, Estimating demand for money in Jamaica, Munich Personal RePEc Archive,   last accessed on January 17, 2012http://mpra.ub.uni-muenchen.de/1023/1/MPRA_paper_1023.pdf 

Economics
The supply and demand simulation featured a number of different economic prniciples at work. In terms of microeconomic principles, two that were featured prominently was the relationship between supply and demand. The impact of these two variables on the price and availability of apartments in Atlantis was at the core of the simulation. Another was price elasticity of demand. There were also some macroeconomic principles outlined, as they affect supply and demand. One was the overall population, its growth and demographic change. These factors all contribute to the supply and demand characteristics of the Atlantis rental housing market. Another macroeconomic concept that came into play was the concept of equilibrium and the effects of price ceilings on both supply and demand.

External factors cause the supply and demand curves to shift. The supply curve is shifted, for example, if there is new supply in the market. A new building would increase…...

Unemployment and its Effect on Aggregate Supply and Demand:
The Obama administration is looking for ways to create jobs and stimulate growth after temporarily setting aside the debt limit. The need for job creation and stimulating economic growth originates from the high unemployment that the country experiences. This high unemployment rate is an actual reflection of the serious shortfall of aggregate demand in the United States. The U.S. unemployment rate is high essentially because the country's economy is generating below its capacity. Actually, while the U.S. economy has made some gains from time to time, its real GDP is estimated at 6% below its trend path or capacity.

There are various reasons attributed to the high unemployment rate including its consideration as a consequence or outcome of the collapse of demand rather than a distinct, instantaneous problem. Some of the reasons attributed to the unemployment problem in the United States include…...

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References:

Bartlett, B. (2011, August 16). It's the Aggregate Demand, Stupid. The New York Times. Retrieved March 1, 2013, from  http://economix.blogs.nytimes.com/2011/08/16/its-the-aggregate-demand-stupid/ 

Blinder, A.S. (2008). Keynesian Economics. Retrieved March 1, 2013, from  http://www.econlib.org/library/Enc/KeynesianEconomics.html 

Goodwin et. al. (2006, November 3). Theories of Unemployment. Retrieved March 1, 2013, from  http://www.eoearth.org/article/Theories_of_unemployment

Keynesian Aggregate Expenditure Model
Two Quotations:

Company profits grew strongly in the June quarter putting another question mark over the extent of the predicted economic slowdown..."

However the central bank acknowledged that the weaker data for capital spending intentions are at this point the only clear evidence of an impending slowdown"

These two quotations regarding the same economic scenario seem to pose the question to consumers and economists alike -- why a predicted economic slowdown, if company profits are growing strongly? hy place so much fear in the data regarding capital spending intentions on the part of consumers? hy turn to the tools macroeconomics has long focused on, that of monetary policy, which the central bank controls, and fiscal policy, which the federal government controls, to shift the current state of economic equilibrium, as described above? (Schenk, 1997, "Synthesis")

The answer lies in the Keynesian aggregate expenditure model. This model is the generic term…...

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Works Cited

Keynesian Aggregate Expenditure Model." (2004) Amos Web. Retrieved on June 20, 2004 at http://www.amosweb.com/cgi-bin/gls.pl?fcd=dsp&key=Keynesian+aggregate+expenditure+model

Macroeconomic Equilibrium. (2004). Retrieved on June 20, 2004 at http://nova.umuc.edu/~black/meq00.html

Scheck, Robert. (1997) "Activism." Retrieved on June 20, 2004 at http://ingrimayne.saintjoe.edu/econ/Keynes/Activism.html

Scheck, Robert. (1997) "Synthesis." Retrieved on June 20, 2004 at http://ingrimayne.saintjoe.edu/econ/optional/ISLM/Overview14ma.html

The hiring would then lead to an increase in consumer spending, which could encourage other businesses to increase their hiring as well. The increased business investment could allow companies to develop processes, technology and capacities that will allow them to not only increase their presence in domestic markets but to increase their exports as well. The Keynesian as-AD model assumes that this multiplier will result in an increase in aggregate demand and aggregate supply, if governments increase spending. For the government, the multiplier is expected to decrease with the size of the investment, so the ideal amount of spending is not infinite, but is constrained by a declining multiplier, which would lead to an equilibrium level of government spending.
The as-AD model illustrates another reason by government spending cannot be infinite. As and AD increase, P also increases. This means that inflation occurs as demand and supply in the economy…...

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Works Cited:

Moffatt, M. (2010). Aggregate demand and aggregate supply practice question. About.com. Retrieved June 17, 2010 from  http://economics.about.com/od/aggregatedemandsupply/ss/aggregate_6.htm

Most of our example essays dealing on immigration and the economy focus on the United States, so we cannot point you towards a handy on-point example essay that will outline the format and give you a good idea of the type of content you should have.  However, we can still give you a great starting point for an essay about the interaction of immigration and the economy in the UK.  In your essay, you could look at several different factors that impact the economy.  These factors include the number of available workers,....

Introduction Government spending plays a crucial role in shaping a country's economic trajectory. It can stimulate economic growth, redistribute income, and provide essential public services. South Africa, like many other countries, faces the challenge of balancing its spending needs with the imperative of fiscal sustainability. This literature review examines the future projections of South African government spending relative to GDP and explores the potential impact on the country's economic outlook. Historical Trends and Current Situation Over the past two decades, South Africa's government spending has grown steadily, albeit with some fluctuations. As a percentage of GDP, government spending increased from 25.7% in....