If the government did not intervene to close the gap, would the economy return to long-run macroecon. equilib.?
ROTFL. 1. To all intents and purposes, the economy is NEVER in long-run macro-economic equilibrium. And if it just happened to be, we would never know it. The world just changes too fast. The "long-run macro-economic equilibrium" is a nice concept for over-simplifying reality for the purposes of understanding how economies work, but don't try applying it blindly to a real economy. 2. You also implicitly assume that there is one "long-run macro-economic equilibrium", or at least one distinguished one to "return to". That too is an oversimplification. There is no doubt that that if the government were to have done nothing, the economy 5 and 10 years down the road would be different from what it will be now that the government has already done something. And, similarly, anything the government does or does not do in the next year or so in the way of another stimulus package or a jobs program will also make a difference 5 and 10 years down the road. There is not just one long term future! http://www.slate.com/id/9593 3. That means people get to argue about which long term future is best. Some people, especially the Austrian School, argue that government intervention, of necessity, makes things worse - that in the long term the economy would be better off for a nice depression (unemployment is, after all, voluntary they say) http://economix.blogs.nytimes.com/2008/1... and will return to "stability" faster. Among other things, they claim that intervention by the governments will create yet another boom to be followed by yet another bust, etc. http://mises.org/story/104 Others disagree: http://www.nytimes.com/2009/10/02/opinion/02krugman.html
Why are Americans close-minded to any economic system besides capitalism?
The Cold War. The rivalry between the United States and the Soviet Union was mostly based on our preferred socio-economic models. Capitalism became equated with America and patriotism; communism was equated with the Soviets and treason. Some people became so indoctrinated with Red Scare propaganda that they believe any movement away from strict free market capitalism is a violation of the values our country was founded under.
Which of the following are more closely associated with the realm of positive economic analysis?
a. Providing guidelines for a fair distribution of income, where everyone can benefit equally. b. Figuring out what an economy is and how it actually works. c. Determining how the federal government should run establish a tax structure. d. Establishing the value of what should be considered a fair market price. State why.
Which of the following is most closely associated with positive economics?
a. determining the impact of government spending on the actual level of total employment. b. determining the best level of immigration into the country, c. determining whether too many luxury goods are being produced. d. determining whether the government should reduce poverty. e. determining whether the government should alter income taxes in order to increase total employment,
Why does govt spending increase interest rates?
Correction: Increased government spending through borrowing leads to increase in interest rates for private investment. I'm going to give a very basic explanation as to why this happens: The reason is that the borrowing takes place to finance the deficit caused due to excess of government expenditure over government revenues. Banks however, have a finite sum of money that they can lend. If the government (for whatever reason) decides to borrow some of this money, the total sum of loanable money with the banks gets reduced, hence for this reduced balance, banks charge a higher interest rate from private parties.This is actually a simple concept of demand and supply. For a fixed supply of loanable funds, if the demand for these loanable funds is increased due to an increase in government spending, then the interest rates are going to go up.
What is the possibility of Ireland leaving the EU as their economy is so closely linked to the British?
Maybe, possibly, conceivably, if the UK had actually asked Ireland’s opinion about whether it would like to leave the EU or not before it triggered Article 50, we might have thought about it for a few minutes before saying politely “thanks but no thanks”, but as the UK gave Ireland as much thought as it ever did - as in, “oh, you’re still there? and you’re INDEPENDENT of us now?” - there’s no chance, and we’re not even going to bother to pretend to be polite about it. And after the UK trying to push an astroturf “irexit” movement in Ireland and claiming that could ever be a thing, that Ireland could leave the EU and join the Commonwealth instead, well that just gets people’s backs up even more, as it shows that no-one in Westminster has ever picked up a history book of Ireland in their lives.The only reason that Theresa May hasn’t thrown NI under the bus over the border issue is she went and held that spectacular miscalculation of an election and effectively put the DUP in charge of her brexit negotiations, absent that and the EU/UK border would be in the Irish Sea and everyone would be happy (well, bar the DUP but no-one would have to listen to them).On the economic side, ever since Ireland joined the EEC, it’s been successive Irish government’s policies to deliberately decouple the Irish economy from its dependence on the UK. So, the economies are still linked, but nowhere near as much as they were. It’s going to be painful for us all right, but not as painful as it is for the UK, as our government has been working on putting plans in place for the last 2 years, as opposed to sticking its fingers in its ears and going “lalalala, it’ll all be fine, easiest negotiations in history, millions of trade deals”
How is economic growth related to productivity?
Productivity means Quantity of output produced by one unit of production input in a unit of time. For eg. a machine can produce 8 tons of output per hour.Economic Growth is the Value of output obtained with one unit of input. For eg. if a machine produces in an hour, an output of 4 units, whose price is Rs. 10 each, then its growth is Rs. 40.Productivity and economic growth are closely linked because economic growth occurs when productivity increases to allow for such growth. Productivity occurs when various raw materials and other productive prerequisites, such as manpower and technology, are used to make some final product that is sold to and used by consumers. When productivity decreases without a corresponding decrease in demand, prices rise and fewer people are able to get what they want or need, so economic growth does not occur.Hope that helps!