This website uses cookies to ensure you have the best experience. Learn more

Using The Ad As Model, Explain The Possible Effects Of A Sustained Appreciation Of The Local Currency On The Government's Macroeconomic Objective

930 words - 4 pages

Assume that initially the economy is at the equilibrium level of output where aggregate demand equal to aggregate supply and this is shown diagrammatically below.Aggregate demand is the quantity of total output demanded at a given price level and comprises total of all the consumption and investment goods and services as well as the required goods and services of the government and net exports. A sustained appreciation of the local currency would bring about negative effects to the economy in the short and long term. In the short term, the price of local goods and services would be relatively expensive to the goods and services of other countries which would consequently lead to a fall in ...view middle of the document...

In the long term, a decrease in aggregate demand is not desirable because it could lead to a recession in the business cycle or the economic activity. This phase is characterized by such conditions such as a fall in the rate of economic growth, decreasing employment and higher levels of job vacancies and a reduction in the rate of prices or wages growth. There are four major macroeconomic objectives that each government would strive to achieve. They are price stability, full employment, economic growth and external balance in equilibrium. In order to improve the economic activity, there are two options for the government to undertake. They are the expansionary policies which are demand management policies or microeconomic reforms of the supply management policy.Expansionary policies such as fiscal and monetary policies indeed can stimulate the aggregate demand but they have destabilizing side effects that may impose more problems to the economy. For instance, expansionary fiscal policy like lower direct and indirect taxes may experience higher consumption fairly shortly after implementation. This however, may affect its productivity adversely if the increase in aggregate demand leads to an increased interest rates which are contractionary. As for expansionary monetary policy which is of attempts like lowering the interest rates, ease of obtaining credit facilities and increasing the issue of credit card applications is time-consuming and this can help to reach the full employment objective but also, worsening the price stability objective.On the other hand, supply management policy is directed towards improving producers' ability to reduce costs of production and to increase efficiency or productivity thus lifting the competitiveness of suppliers goods and services on the world...

Other Essays On Using The AD-AS Model, Explain The Possible Effects Of A Sustained Appreciation Of The Local Currency On The Government's Macroeconomic Objective

Explain the meaning of 'a Theory of Society'

345 words - 2 pages A theory is a set of ideas that claims to explain how something works. A Sociological theory is, therefore, a set of ideas that claims to explain how society or aspects of society work.'Social theories' as a field of study is particularly difficult to accurately determine or define. As understood, social theories are the systematic study of human society, including the processes of social change and transformation, involving the formulation of

The Effects Of Lead Poison On Children

2547 words - 11 pages . Researchers here found the cue chalk could actually be a source of environmental lead(Modica 1996). There are many effects or symptom that lead poison can have on a child if diagnosed at an early age. These injuries our so severe because the body and the brain are not fully developed, which can leave children with subtle but irreversible injuries that does not appear until many years after the exposure of lead(Monheit, 1). In young children, lead

Effects Of Globalization On The Environment

584 words - 3 pages Effects of Globalization on the EnvironmentGlobalization has had a huge impact on the world in a number of ways. It has increased the integration of countries' individual economies, the rise in the world trade and multinational companies, and the effect of large amounts of money moving in and out of economies throughout the world. People around the world are more connected to each other than ever before. Information and money flow more quickly

The Effects Of Fairy Tails On Children

1181 words - 5 pages Most of parents read fairy tales to their children and these children enjoy listening fairy tales. However, in fairy tales there are some characters which are taken as a model by children and patterns connecting with some patterns like wedding. In The Green Fairy Book, in 1982, as Lang refering to Lang to emphasises fairy tales to have fun for children but also teach them. Those characters and symbols have active roles on children's behaviour

"The Microsoft Monopoly Should Be Broken Up." Evaluate This Claim Using Economic Theory And Evidence On The Welfare Effects Of Monopoly And Competition

2010 words - 9 pages the past. They also criticised the traditional method of identifying a monopoly, which was based on looking at what percentage of a market was served by the biggest firm or firms, using a measure known as the Herfindahl index. Instead, they argued that even a market dominated by one firm need not be a matter of antitrust concern, provided it was a contestable market. A perfectly contestable market exists when the costs of entry and exit by

The Effects Of Cannabis On The Human Reproductive System

1749 words - 7 pages dream-like state and tiredness. There are many effects to the oral use of marijuana, some of which are psychological, physiological, cardiovascular, respiratory and neurological.In searching for evidence of the effect of marijuana on the reproductive system I learned of how they figured out that it does have consequences on males. They found a cellular signaling system that responds to THC as well as to anandamide. Now anandamide is a substance

The Effects Of Globalisation On The Australian Business Culture

2809 words - 12 pages corporations has produced a model for people based on a form of cultural homogeneity. They imply it relies on economic inequality, social authoritarianism, the control discipline inherent in contractual employment or mass unemployment and worse, it promotes an ecological instability based on the destruction of the environment (http://www.siol-nan-gaidheal.com/hrogr.htm).Supporters of globalisation dismiss the critics of the globalisation as being

Effects Of The Industrial Revolution On The Working Class Family

1556 words - 7 pages Sadler Commission on Child Labor (1832), such as that of William Cooper, a young boy working in a flax mill, prove that the children had to begin work very early in the morning at roughly 5 am and ended their days late in the night at 9pm. William's older sister had even longer days where she started at 5am and finished at 11pm. They were given little breaks, one forty-minute break for their lunch in a fifteen-hour day. Sometimes they were even

The Effects Of Exercise On The Pulmonary Ventilation Rate

910 words - 4 pages Respiration is the process that takes place in every living cell to make energy available to the body. Energy is vital for us to carry out many life processes such as movement and so respiration in essential to life. During respiration glucose and oxygen are used in a reaction that produces energy and gives out carbon dioxide and water as waste products. Glucose is obtained by digestion of food and oxygen is taken from the air during a process

Explain Jesus' teaching about the kingdom of god as presented in the Gospel of Mark for his first disciples

546 words - 3 pages and became a teacher of nutrition and childcare. She helped the poor, being aware of risks such as catching diseases and assignation. Jean continued her work and followed her destiny. Unfortunately she died in 1980 after being sexually abused and killed. She is a true example of a good Christian, sacrificing her life.Many of those mentioned have accepted their calling without question. These people are truly devoted Christians, leaving riches or using them for the good of others. They are role models and have a positive influence on us by helping create a kingdom on earth.

Discusses The Symptoms, Possible Treatments And Famous Cases Of ALS

671 words - 3 pages effects of diseases like ALS.The most famous case of ALS known is the case of Lou Gehrig. Lou Gehrig was a famous baseball player, and died from ALS. Gehrig was a superb ball player and he was also an incredible human being. Gehrig was modest, never flashy, and as a result he did not receive the attention that was bestowed on his colorful teammate, Babe Ruth. Gehrig was even tempered and well liked by baseball fans and the press. On June 2nd

Similar Papers

Is The U.S. Using The Issue Of Truck Safety As A Trade Barrier To Mexico?

884 words - 4 pages 1. Is the U.S. using the issue of truck safety as a trade barrier? What proof can you offer?I think U.S. is using the issue of truck safety as a trade barrier because the increase in Mexican trucks within the limited border zone has had an adverse affect on safety in the U.S. For example, in Texas border counties, within the commercial border zone, have seen a dramatic increase in highway fatalities and serious injuries from truck with Mexican

The Marketing Plan Objective Essay

605 words - 3 pages share for around 2% per annum in the ice cream market. As the company share is based on the target market, we will also provide the share's details of total territory share on each company together with the sales report from each intermediary through the channel distribution.5. Timing objectiveAs we are selling ice cream, seasonal impact has a big influence in the society demand. People will usually buy ice cream in the summer season; conversely

Napoleon's Gain To Power; How He Sustained It And The Effects

1301 words - 6 pages Terror Era, revolving around Napoleon. The true child of the enlightenment constantly focused on the bettering of the nation, ensuring its security and tranquility, without forfeiting and succumbing to the omnipresent force of corruption. And while in many regards he did not fall to it, he was a man of ambition, an ambition that finally led to his demise. As the singer and actress Jennifer Lopez had stated in her song Jenny From the Block, "Don't

Future Of The Osi Model Essay

524 words - 3 pages American ministry of defense (the DOD: Department Of Defense). Besides the possibility to interconnect heterogeneous networks, this network was supposed to resist to a possible nuclear war, contrary to the telephone network usually used for telecommunication but considered as too vulnerable. It was then decided that ARPANET would use a standing out and promising new technology: packet switching (datagram mode). It is to meet this context that the