StudentShare solutions
Triangle menu

Marcoeconomics - Essay Example

Nobody downloaded yet

Extract of sample

In periods of recession, economic activity drops down to almost null - at the end of both the consumers and the business owners; buying, selling, production and employment are at their lowest. The severity of recession is known as depression.
When recession eases and the economy takes an opposite direction to take an upturn towards better financial prospects, there emerges the hope of recovery. It can be considered as the transition phase which leads to growth.
As the trough advances towards the peak, the era of growth begins; the consumer confidence increases and business activity starts to pick up - since employment is generated, income of the citizens increase and hence increasing demand and hence production levels picking up and so the cycle continues. But, this activity period is coupled with increasing price levels.
The boom does not last forever, even healthy economies face worst. Like recovery, this is a transition period where economy starts to move towards the bottom. Consumer purchases lowers, demand weakens and hence business activity starts to fall.
There are multiple reasons that lead to changes in the levels of the economic activity - volatility of investment spending, momentum or follow the herd strategy of the consumers, technological innovation, varying inventory levels, fluctuation in government spending, effect of political conditions on business cycles, monetary policy, change in import and export situations, etc (Knoop, 2004)ii.

The global financial crisis all started with the panic emerging in the banking system, with need to nationalize the banks. The credit system was affected with consumers and businesses facing difficulty in obtaining credit, housing market was highly affected. Thus, activity dropped hugely; there was fall in profits of many companies, pessimism and loss of confidence, net worth of businesses declined, and businesses precipitating into bankruptcies. This era can be characterized as Recession.

(b) What are the key differences between the Classical and the Keynesian point of views Which of these frameworks has the Australian government been favouring in the global financial current crisis of 2008 and 2009

Classical economics believe that market will adjust itself and has its basis on Say's Law - people supply things to the economy and in return receive income to demand things of the value they have supplied. With regards to unemployment it is believed that unemployment is caused by excess supply due to higher wage levels. Classical economists therefore say that when left on its own, equilibrium wage levels will be achieved and economy will be at a full employment.

In 1936, John Meynard Keynes, emphasized the role of the government for stabilizing the economic output over the different business cycle. He pointed out that the private sector decisions can lead to the inefficient macroeconomic outcomes, whereas public sector interference via monetary policy and fiscal policy can lead to positive outcomes. Since individuals and institutions, lead to micro level decisions which leads to economy operating below its potential output and growth. Therefore, economy should be stimulated by reducing interest rates, investing in the infrastructure by the government. This helps in economic activity to pick up. Cheaper credit will be available for businesses to fund their capital requirements ...Show more


(a) Illustrate and explain the four stages of the business cycle in relation to the key macroeconomics objectives in context of the global financial crisis that the world is experiencing since October 2008.
The fluctuation of the economic activity in the economy is characterized by the different stages in the economy…
Author : stoltenbergbail
Marcoeconomics essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Single Subject design Nation Guard Youth Challenge Program
Challenge is an intensive residential program that aims to reclaim the lives of youths at risk who have dropped out of high school and its aim is to give them the skills and values to succeed as adults. It was launched in 1993 and over 100,000 young people have completed the program.
8 pages (2000 words) Research Paper
Marketing Research Individual Assignment
This report considers the different forms of customer commitment. Additionally the report specifically considers the means of increasing customer commitment and product loyalty. Analysis Customer commitment has been established through a variety of specific constructs.
8 pages (2000 words) Essay
Yu Minhong: A Chinese Entrepreneur
According to the paper a country’s prosperity depends largely upon the entrepreneurship prevailing in the country. This is the reason that the governments all around the world strive to develop and creates opportunities and conditions for entrepreneurs to flourish so that these entrepreneurs make progress in the best interest of their respective nations and increase the competitiveness in the business world.
7 pages (1750 words) Essay
Multicultural Education: The Challenge
History is told by the victors, and in a diverse classroom, there may be students from both sides of historical conflicts. Presenting history in an unbiased fashion can be challenging, but including the students' opinions can help to mediate the differences. Bilingual discussions may be appropriate as a learning tool for all the students.
1 pages (250 words) Essay
Shakespeares Poems
Comedies, on the other hand, end happily. And whereas the tragic hero falls from an originally fortunate position, the comic hero rises above obstacles which lay on his way; he is triumphant in the end. In the Aristotelian definition of tragedy, the protagonist or the tragic hero is a member of royalty, or occupies a noble position, who has admirable personal qualities.
7 pages (1750 words) Essay
Reading Response: Poetry and Performance
This was my reading experience of the poem, and I managed to perceive the poem as follows. The poem’s first line opens with a group of boys at Golden Shovel, pool hall. The name of the pool is a symbol of the shortness of their youth days. The
1 pages (250 words) Essay
Choose a crisis and discuss how the Chinese government handled it
This paper outlines the population crisis that has faced the people of China leading to government intervention. During the late periods of 17 century to 18th the country experienced a doubled population.
1 pages (250 words) Essay
Shale gas
The discovery of shale gas has fundamentally changed the hitherto gloomy picture with regards United States’ energy requirements, providing support to an otherwise moribund economy in
3 pages (750 words) Essay
Gas law
Part three will illustrate the relationship between pressure and temperature. The results of these measurements will be used to derive the Ideal Gas Law. From figure 1, we deduct that volume of a gas increases
1 pages (250 words) Essay
Case Discussion The Espresso Lane to Global Markets
Consumption has to do with demand and sale of espresso in the market, which has a direct correlation with economic growth of a country which in turn influences the purchasing power of consumers. There
3 pages (750 words) Case Study
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Let us find you another Essay on topic Marcoeconomics for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us