However, if both government and private sector act actively (both sectors spend excessive money in the market), the price of goods and services will increase. ... Increasing tax rate would discourage business investment, therefore, less job opportunities in the market and less money flows in the circulation. ... According to Keyness theory, the government should increase founds for infrastructure so that there wont be excessive money in the circulation. ... Also the Federal Reserve could take an easy money policy to stimulate the economy and increase the demand. First the Fed could lower the ...

• Word Count: 1364
• Approx Pages: 5
• Grade Level: Undergraduate

This means a company can produce more products at a cheaper price, saving money as well as making it. ... Also net exports would increase as there is a trade surplus which proves the efficiency of production. ... Interest rates can be defined two ways; the cost of borrowing money and the reward for saving it. ... This high interest rate will decrease aggregate demand due to a lack of money being pumped into the economy. Low interest rates increase investment, except from when in a recession, the low interest rates form a "paradigm of thrift" where consumers are scared of the future and therefo...

• Word Count: 817
• Approx Pages: 3
• Grade Level: Undergraduate

Species (true money) means gold. ... It will accumulate gold, which increases money supply and raises the price level. ... Using a theory called the quantity theory of money, Hume argued that in countries where the quantity of money increases, inflation would set in and the prices of goods and services would tend to rise while in countries where the money supply decreases, deflation would occur as the prices of goods and services fell. ... Thus, an increased flow of the gold into European Country would not necessarily increase that country's wealth substantially. ... David Hume erroneo...

• Word Count: 1583
• Approx Pages: 6
• Grade Level: Undergraduate

According to the definition it can be inferred that an increase in supply of currency/money is the cause, which tells us that the central bank of a nation is printing more money as a result of government spending. ... On the other hand an increase in demand is mainly caused by increase in government expenditure, increase in private expenditure, increase in consumer spending as a results of modern-day credit purchases, reduction in taxes, governments repaying their debts, increase in population, as well as deficit financing. ... Greater utilization would increase supply as a whole too. The bas...

• Word Count: 987
• Approx Pages: 4
• Grade Level: Undergraduate

In 1936, John Maynard Keynes published The Theory of Employment, Interest, and Money. ... John Maynard Keynes suggested that the government should jolt the economy by increasing the aggregate demand. ... He believed the government should increase spending to help the economy and once the economy started to become table again the government would pull away. ... The government spends money in the economy today anyway, so it would be convenient for the government to increase spending when needed. ...

• Word Count: 338
• Approx Pages: 1
• Grade Level: Undergraduate

For example, an increase in demand for Aus exports from china has been recently occurring with a 55% jump in demand for iron ore, will increase demand for the AUD and cause an appreciation. This is best shown through an increase in demand on a diagram. [SD graph of AUD showing an increase in demand] As seen on this diagram, the price of the $A has increased due to the sharp rise in demand for exports. ... This is because investors would move their money from Australia into neighbouring countries, an event deemed as capital flight This would increase supply and reduce demand for the AUD causi...

• Word Count: 1109
• Approx Pages: 4
• Grade Level: Undergraduate

Keynes, along with other economists of his time, saw an increasing number of flaws in the current economic thought. ... This theory focuses on the idea that as the levels of consumption increase, more money enters circulation and the individual has more money to invest back into the economy. ... Interest rates decline in Keynesian economics in order to increase investment volume, consumer confidence and circulation of money. ... Like Roosevelt, Johnson's administration set up many government programs and pumped money into the economy. ... Thus the reason why Keynesian economics is best su...

• Word Count: 1814
• Approx Pages: 7
• Grade Level: Undergraduate

Focusing on debt sustainability, the IMF lends money to debtor countries so they could pay the interest on their outstanding debts (Meltzer, 205). ... In theory, IMF credit is meant to increase reserves. ... In addition, "IMF credit is meant to alleviate restructuring the economy, in practice the result might be the exact opposite: Money disbursed increases borrowing governments' leeway, thus reducing incentives to reform (Dreher, 773). Now with money at their disposal, governments can pursue inappropriate policies longer than they would otherwise do (Ibid, 773). ... Moreover, it could be...

• Word Count: 1443
• Approx Pages: 6
• Has Bibliography
• Grade Level: Undergraduate

They have done this by using their money to create toll-free highways, fighting for worker's rights, deflate the public deficit, and increase wages. ... The work force significantly increased, with the loss of jobs in agriculture, which was the traditional method in which the Spanish earned money, and the growth of the tertiary part, which incorporated women into the workplace. ... This sector utilized standard technology and based its competitiveness on its cheap labor and its capital on a cheap money monetary system. ... As a result, the public deficit increased and there was a steep fa...

• Word Count: 2349
• Approx Pages: 9
• Grade Level: Undergraduate

As subprime mortgages increased in popularity local banks became replaced as the place to secure a mortgage by various shadow bank institutions acting as mortgage brokers. ... Rather than the traditional originate to hold policy in which banks lending out the money would hold that mortgage and receive money from the borrower, the policy shifted towards originate to distribute in which the mortgages were packaged and then sold off as securities (Krugman & Wells 5). ... This money was lent to banks and the auto industry rather than being used to buy up the toxic assets. Some of the financial ins...

• Word Count: 2201
• Approx Pages: 9
• Has Bibliography
• Grade Level: Undergraduate

Besides, boosting the expenditure of the government injects money into the economy and this translates into increased aggregate demand. On the other hand, monetary policy involves the cutting down of interest rates in the aim of increasing consumer expenditure and investment. ... Granted, these corporations are not to blame because their primary objective in business is to make a profit and putting their money in an economy where the risk of losing it is high would be self-defeating (Ferran et al., 2012). Commercial Banks During the implementation of an economic stimulus program, governments...

• Word Count: 629
• Approx Pages: 3
• Has Bibliography
• Grade Level: Undergraduate

Besides, boosting the expenditure of the government injects money into the economy and this translates into increased aggregate demand. On the other hand, monetary policy involves the cutting down of interest rates in the aim of increasing consumer expenditure and investment. ... Granted, these corporations are not to blame because their primary objective in business is to make a profit and putting their money in an economy where the risk of losing it is high would be self-defeating (Ferran et al., 2012). Commercial Banks During the implementation of an economic stimulus program, governments...

• Word Count: 629
• Approx Pages: 3
• Has Bibliography
• Grade Level: Undergraduate

This can have a beneficial effect on growth, for various reasons: The poor can increase their levels of savings. ... Greater equality increases levels of consumption. ... As a result, income redistribution can increase economic growth if it is effectively carried out without inefficiency. ... If greater equality is achieved, it may increase the consumption of domestically produced goods, vs. imports. ... The idea popularly called 'trickle-down economics' suggests that more money at the 'top' will benefit everyone. ...

• Word Count: 527
• Approx Pages: 2
• Grade Level: Undergraduate

And the countries that qualified do not only have to have an increasing inflation rate but the need to sustain it. ... Then government spending exceeds government income, the government concerned has to borrow money or raise taxes to fill the gap. ... This means that there will be no more conversion of money when you're inside Europe, for example from French Franc to German Mark. ... This economic and monetary union would project a push and pull scenario between all member states, if the currency would increase its value, the better for those who have less economic growth. ...

• Word Count: 3783
• Approx Pages: 15
• Has Bibliography
• Grade Level: Undergraduate

TAL also argues that, when a definition of poverty using an increasing threshold is used, there has still been no statistically remarkable trickle down effect in the post 1963 period for any demographic group. ... Once the lower end of the income distribution is not uniformly distributed, even a constant trickle down effect, which brings about equal dollar increases in all family incomes, would lift only fewer and fewer families above the poverty line. ... An absolute analysis of trickle down from which policy implications can be drawn requires time-series data on both money and non-money tr...

• Word Count: 523
• Approx Pages: 2
• Grade Level: Undergraduate

Smith points out the mutual benefit to city dwellers and farmers of trading manufactured goods for produce or money for either and other detailed examples of the mechanisms of capitalism in his 1778 work The Wealth of Nations. ... He was largely ignored by scholars in his lifetime, but after his death his influence increased with the growth of the labour movement. ... John Maynard Keynes is best known for his classic book The General Theory of Employment, Interest, and Money that was published in 1936. ... He insisted that direct government intervention was necessary to increase total spend...

• Word Count: 684
• Approx Pages: 3
• Grade Level: Undergraduate

This had the effect of increasing unemployment and further reducing business. Workers started to get laid off, got less bonuses and overtime, and so began to spend less money. ... According to Keynesian thought, you can combat this problem by running a budget deficit by increasing government expenditures in excess of current tax receipts. The increase in government expenditures should be sufficient to cause the aggregate demand curve to shift to the right from (AD1) to (AD2), restoring the economy to the natural level of real GDP. This increase in government expenditures doesn't have t...

• Word Count: 714
• Approx Pages: 3
• Grade Level: Undergraduate

Basically instead of just providing money to a country, the IMF exchanges hard currency for the country's soft currency, this term is usually referred to as "repurchases". The money that is provided by the IMF comes from many different sources like quotas and interest payments or indirectly from major creditors. ... Next many foreign investors began to withdraw their money from Korea and pressuring the Korean banks to repay their previous loans which resulted in general capital flight. ... First was the discussion on increasing the interest rates during the early months of the crisis. ...

• Word Count: 1943
• Approx Pages: 8
• Grade Level: Undergraduate

The fraudulent members of parliament make money for their own benefits and business. ... The cause for increase in unemployment is the escalation of population and ignorance of government policies. ... The consumption of huge amount of public money on law enforcing agencies could not pay peace and tranquility in Pakistan. ... The unemployment and terrorism have become increase because of frustration and energy's agitation. ... In addition, the government debt burden has increased owing to economic shrink vis-à-vis unemployment. ...

• Word Count: 1536
• Approx Pages: 6
• Grade Level: Undergraduate

Indonesia was streamlining its budget by 1982, spending the newly saved money on education (25). ... There was a 12% increase in fuel consumption from 81' to 82', which has persisted as a yearly trend (25). This high level of increase is not sustainable, especially from a country in which 70% of budgetary revenues are from exports of oil and gas (25). ... Suharto gave government money and assets to his children. ... If they had made it easier to invest, the value of the rupiah, as well as their stocks, would have risen, and earned them an exponential amount of money. ...

• Word Count: 1091
• Approx Pages: 4
• Has Bibliography
• Grade Level: Undergraduate

Indonesia was streamlining its budget by 1982, spending the newly saved money on education (25). ... There was a 12% increase in fuel consumption from 81' to 82', which has persisted as a yearly trend (25). This high level of increase is not sustainable, especially from a country in which 70% of budgetary revenues are from exports of oil and gas (25). ... Suharto gave government money and assets to his children. ... If they had made it easier to invest, the value of the rupiah, as well as their stocks, would have risen, and earned them an exponential amount of money. ...

• Word Count: 1091
• Approx Pages: 4
• Has Bibliography
• Grade Level: Undergraduate

This model supports the idea that the economy can be recovered and stimulated when the government assists it by increasing spending, deficit and debts. ... The producers, therefore, will increase supply accordingly to satisfy the demand by employing more laborers and, as a result, reduce the unemployment rate. As the money supply from government is expanded, people would earn more and spend more. Hence, the circular flow of money would be reestablished and the economy would recover. ... In seven years, with an enormous increase in government spending, the U.S. went straight from the Great Depr...

• Word Count: 1372
• Approx Pages: 5
• Grade Level: Undergraduate

This past summer, however, Federal Reserve chairman Ben Bernanke tripled the size of the money supply in his policy of quantitative easing, which could spur inflation if the economy ever stats growing (Sivy, 2013). ... The index for all items, minus food and energy, increased 0.3 percent in January 2013. ... Producer Price Indexes: This index for finished goods increased 0.2 percent in January 2013. ... There may be an increase in taxes, inflation, and gas prices, but far more important are the increase in stock prices and home values (Sivy, 2013). ... Inventories then increase and business...

• Word Count: 1445
• Approx Pages: 6
• Has Bibliography
• Grade Level: Undergraduate

Growth in Apparel Industry in India (AII) is increasing manifold with the change in lifestyle, earnings and urbanization of the customers. ... With the change in lifestyle, increase in per capita income and urbanization of the Indian consumers, the attitude of spending money on fashion related articles such as apparel is increasing a lot. ... The emergence of branded apparel outlets, shopping malls are also increasing rapidly all over India. ... Other apparel segments such as kids wear are also increasing very rapidly [4]. ... An increasing number of international brands across formats shall f...

• Word Count: 1808
• Approx Pages: 7
• Grade Level: Undergraduate

The failing economy also had serious spin off effects on other parts of Russia, including; a huge increase in poverty; a large increase in unemployment; malnutrition has become the normal attire amongst school children; and a worryingly large drop in life expectancy, in 1992, it was recorded that the life expectancy for men dropped to 58. ... The idea of Liberalization of prices, this involved increasing previously high prices for the Russians, but low prices to outside of Russia, because of the poor exchange rates, such as bread and vodka. This should increase revenue from exports out of R...

• Word Count: 1782
• Approx Pages: 7
• Has Bibliography
• Grade Level: Undergraduate