tag:blogger.com,1999:blog-66298695914273807232024-03-13T05:33:29.043-07:00LanceconomicsLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-6629869591427380723.post-36866369929272267992009-04-18T11:10:00.000-07:002009-04-18T11:18:10.249-07:00SavingsSaving is "deferred spending"<br />A perference to consumer tomorrow rather than today<br />Saving is not investment<br />But saving flow into the financial system<br />.......and help to provid the funds for investment spending by firms<br />Introfuction<br />The household saving ratio is measured as the percentage of real disposable income that is saved rather than spent<br />Trend in the Saving Ratio<br />The saving ratio is the percentage of disposable income that is saved rather than spent<br />Saving provide a financial safety net for households<br />A fall in the saving ratio means that household are choosing spending today rather than tomorrow<br />This may be acccompanied by a build up of consumer debt which will have to be repaid at some point in the futureLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com4tag:blogger.com,1999:blog-6629869591427380723.post-72356366929834713642009-04-16T16:42:00.001-07:002009-04-16T17:03:09.843-07:00Measure Natoinal IncomeWhat id National Income<br />National income measures the total value of goods and survices produced within the economy over a period of time<br />National Income can be calculates in three main ways<br />1.The sum od faceor incomes earned in production<br />2.Aggregate demand for goods and survices<br />3.The sum of value added from each prosuctive sector of economy<br />Gross Domestic Product(GDP)<br />GDP measures the value of output produced within the domestic boundaris of the UK<br />GDP includes the output of the foreign owned firms with production plants located in the UK<br />There are three ways of calculating GDP-all of which should sum to the same amount since bu identity<br />National Output=National Expenditure=National Income<br />Under the new definitions introduced in 1998 ,GDP is now known as Gross Valued AddedLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com1tag:blogger.com,1999:blog-6629869591427380723.post-28251362413258777012009-04-13T09:21:00.000-07:002009-04-13T09:51:45.456-07:00The Economic CycleThe Economic Cycle<br />A term used to describe the tendency of economic activity to cycle along its trend path<br />Real GDP shows a series of peaks and troughs along its trend,characterising booms,slowdowns,recessions and recoveries<br />All countries experience economic cycles<br />The Need for Macroeconomic Stability<br />Large fluctuations in output,employment and inflation add to uncertainty for business and consumers,and can reduce the economy's long-term growth potential<br />Stability allows businesses,individuals and the Government to plan more effectively for the long term,improving the quantity and quantity of investment in physical and human capital and helping to raise <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">productivity</span>Lancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com1tag:blogger.com,1999:blog-6629869591427380723.post-33115313521601146262009-04-13T07:13:00.000-07:002009-04-13T07:21:25.698-07:00Consumer spendingKey Issues<br />The meaning of consumption<br />Durable and non-durable goods<br />The key economic factors affecting household consumption<br />Macro-economic effects of changes in consumption<br />Consumption and monetary and fiscal policy<br />Background Information<br />Consumer spending is spending on household goods and services<br />We make a distinction between<br />Spending on durable goods<br />Spending on non-durable goods<br />Consumer spending is the largest component of AD<br />Change in consumer demand have an important impact on short run aggregate demand/economic growthLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0tag:blogger.com,1999:blog-6629869591427380723.post-39164757680452858772009-04-11T07:47:00.000-07:002009-04-11T11:02:16.162-07:00Aggergate SupplyChange in unit labour costs(ULCs)<br />Unit labour costs are defined as wage costs adjusted for the level of productivity<br />Changes to raw material costs other components<br />Fluctuations in the world price of oil,copper,aluminum and other essential inputs in many production processes<br />These costs might be affected by the exchange rate which cause fluctuations in the prices of imports<br />Change to producer taxes and subsidies levied by the government as part of their fiscal policy<br />Changes in VAT on building materials or duty on fuelsLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com2tag:blogger.com,1999:blog-6629869591427380723.post-3944818989922867862009-04-10T12:35:00.000-07:002009-04-10T12:49:50.848-07:00Productivity GrowthProductive is a measure of the efficiency of factors of production in the production process<br />It measures the output we get from a given amount of factor inputs<br />Higher productivity means that we can<br />Produce more goods and services at a lower cost per unit.This will help to reduce prices and increase consumer welfare.<br />Increase total output from our scare factor resources(causing an outward shift of the PPF)<br />Achieve a faster rate of economic growth because of a rise in LRAS<br />Measuring Productive<br />It is not possible to measure productive accurately and objectively in every industry-for example in services such as leisure and catering or eduction or social care services.<br />Labour productivity can be measured by calculating output per worker or output per hour worked<br />Output per hour worker takes into account the average number of hours worker over a given time period<br />Output per worker can vary for a number of reasonsLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com1tag:blogger.com,1999:blog-6629869591427380723.post-68365034323782441352009-04-10T09:50:00.000-07:002009-04-10T10:06:45.651-07:00Economic growthGross Domestic Product(GDP)<br />The money value of all goods and services produced within the UK<br />Also <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">known</span> as GDP at current price<br />Real GDP<br />The volume of goods and services produced within the UK(GDP <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">adjusted</span> for changes in the price level)<br />Also known as GDP at constant prices<br /><a href="http://www.tutor2u.net/economics/presentations/aseconomics/macro/EconomicGrowth/default.html">Economic Growth</a><br />The rate of increase of GDP<br />Economics growth is best defined as the long run expansion of an <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">economics's</span> productive potential<br />The growth rate is also expressed as the percentage annual increase in a country's real GDP<br />Long term economic growth requires<br />An expansion of the supply(stock) of factor inputs(e.g.a rise in the labour supply)<br />Improvements in production technology<br />Increased factor productivityLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0tag:blogger.com,1999:blog-6629869591427380723.post-46557786192038393752009-04-05T14:43:00.000-07:002009-04-05T15:04:44.936-07:00UnemploymentKey issues<br />The meaning of <a href="http://www.tutor2u.net/economics/presentations/aseconomics/macro/Unemployment/default.html">unemployment</a><br />Different types of unemployment<br />Consequences of unemployment<br />Unemployment and <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">economic</span> growth<br />Recent trends in UK unemployment<br />Full employment<br />Measuring Unemployment<br />A Working Definition of Unemployment<br />People able,<span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">available</span> and willing to find work and actively seeking work-but not employed<br />The unemployed are included in the labour force.<br />Types of Unemployment<br />Seasonal<br />Regular seasonal changes in employment/labour demand<br />Affects certain industries more than others<br />Catering and leisure<br />Construction<br />Retailing<br />Tourism<br />Agriculture<br />Type of <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">unemployment</span><br />Frictional<br />Transitional <span class="blsp-spelling-corrected" id="SPELLING_ERROR_3">unemployment</span> due to people moving between jobs:includes people experiencing short spells of unemployment<br />Include new and returning entrants into the labour market<br />Imperfect information about <span class="blsp-spelling-corrected" id="SPELLING_ERROR_4">available</span> job opportunities can lengthen the period of <span class="blsp-spelling-corrected" id="SPELLING_ERROR_5">some one's</span> job searchLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0tag:blogger.com,1999:blog-6629869591427380723.post-51413705880617089732009-04-05T14:12:00.000-07:002009-04-05T14:35:12.676-07:00Standard of livingWhat do we mean by the term"<a href="http://www.tutor2u.net/economics/presentations/aseconomics/macro/StandardofLiving/default.html">standard of living</a>"<br />Sol is a measure of the changes in our economic welfare over time<br />Is the economy meeting people's need and wants?<br />Are our real incomes increasing?<br />The standard of living is basically a <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">quantitative</span> measure of our well-being<br />The baseline measure of living standard is real national income per capital<br />i.e.GDP divided by the total population<br />Real GDP per capital rises when real national output grows faster than population over a period of time<br />Other measure gives a broader assessment of living standards<br />Ownership of consumer durables<br />Personal/Household Wealth indicator<br /><span class="blsp-spelling-error" id="SPELLING_ERROR_1">Environmental</span> Indicators(sustainable economic welfare)<br />Social(Quantity of Life)indicators<br />Human Development Index(United Nations)<br />Index of sustainable <span class="blsp-spelling-error" id="SPELLING_ERROR_2">Economic</span>Welfare(<span class="blsp-spelling-error" id="SPELLING_ERROR_3">ISFW</span>)Lancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0tag:blogger.com,1999:blog-6629869591427380723.post-9747056395474985442009-04-05T13:08:00.000-07:002009-04-05T14:11:10.249-07:00Balance of paymentThe <a href="http://http//www.tutor2u.net/economics/presentations/aseconomics/macro/BalanceofPayments/default.html">balance of payment</a> accounts include:<br />a.Trade in goods<br />b.trade in services<br />c.The net flow of investment <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">income</span> from overseas assets.<br />d.<span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">Transfer</span> of money between people and government<br />Trade in Services<br />Tourism and travel including Civil Aviation<br />Insurance and Business Consultancy Services<br />Banking and Accountancy services<br />Data process and other information services<br />Music and Entertainment<br />Shipping<br />Economic Effects of a Fall in Exports<br />Possible effects of a fall in demand for export in oversea markets<br />Negative impact on aggregate demand<br />C+I+G+(X-M)<br />Fall in national output-multiplier effect on income and spending<br />Might trigger an economic slowdown/recession<br />Actual GDP will fall below potential GDP(negative output gap)<br />Economic Policies to Reduce a Trade Gap<br />The cyclical element of the deficit tend to be self-correcting<br />A lower exchange rate improves the trade balance after a time lag-but this depends on the elasticity of demand and supply for UK output<br />Expenditure-switching Policies<br />Depreciation of exchange rate<br />Raises sterling price of imports<br /><span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">Higher</span> profitability of exporting<br />But impact of lower exchange rate depends on elasticity of oversea demand for UK exportLancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0tag:blogger.com,1999:blog-6629869591427380723.post-16068802777952623762009-04-05T07:13:00.000-07:002009-04-05T07:39:00.505-07:00Exchange rateThe <a href="http://tutor2u.net/economics/presentations/aseconomics/macro/ExchangeRates/default.html">exchange rate</a> is the value (or purchasing power)of a currency in terms of what it can buy of other currencies.<br /> A large share of trading is <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">purely</span> speculative-i.e.currency dealer seeking to make a profit.E.g.buy US dollars in expectation that the dollar will rise against.<br /> The UK operates with a floating exchange rate system.If the demand for sterling rises relative to supply then the external value of the pound will appreciate.If the supply of pounds on the foreign exchange market increase relative to demand,then the pound will depreciate in value.<br /> During 2002 and 2003,the pound was rising <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">against</span> the US dollar(an exchange rate <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">appreciation</span>)<br />Exchange rates can be quite volatile and size able percentage changes over the course of a few months.<br /> A high pound leads to lower import price-this boosts the real living standards of consumers at least in the short run.<br />A strong exchange rate helps to control inflation because domestic producers face stiffer international competition from cheaper imports and will look to cut their cost accordingly.Lancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0tag:blogger.com,1999:blog-6629869591427380723.post-49829632793667201772009-04-05T06:47:00.000-07:002009-04-05T06:50:17.258-07:00Aggregate demandToday,I went to look at the<a href="http://www.tutor2u.net/economics/presentations/aseconomics/macro/AggregateDemand/default.html"> <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">revision</span> presentation</a> on aggregate demand.This is what it is about.Lancehttp://www.blogger.com/profile/17820293550873035459noreply@blogger.com0