Macroeconomics And Macroeconomics Individual Assignment

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Macroeconomics Individual Assignment 1 Wil Creasy Part A Since the beginning of the 1990s, Japan has experienced significant declines in household net savings rates. The 90’s was a decade of slow growth, and households devoted a large portion of their incomes to maintaining consumption levels. “Large amounts of liquid savings in postal savings accounts and in banks meant the majority of the population did not feel they had to increase saving in order to rebuild assets.” (Feldstein, 2010) A number of factors contributed to this decline in the savings rate. One such factor is that demographic structure is changing rapidly. There is an increasing number of retirees relative to the people within the labour force. The people in the labour…show more content…
Japan’s public pension system can be divided into the Employees Pension System, the Mutual Aid Association Pension System and the National Pension System. Pensions can alliveate many financial worries that people in the workforce may experience into the future and problems a retiree is experiencing currently. This creates a situation where there is less of a reason to save and hence declines in savings rates occur. Real incomes for workers experienced slow growth from the beginning of the 1990’s to the present day in Japan. This has impacted savings rate as a large portion of the population do not have the finances to save effectively. This would account for low consumer spending regardless of the low saving rates. Reductions in labour productivity and issues with corporate competitiveness are two main factors behind this reduction in real incomes. Part B a) Real GDP Equation: Y=C+I+G+X-M Y=C+I+G+NX Household Consumption: June 2013: $205,559,000,000 September 2013: $207,078,000,000 December 2013: $208,158,000,000 March 2014: $209,729,000,000 Total: $830,524,000,000 Investment: Dwelling June 2013: $18,122,000,000 September 2013: $17,979,000,000 December 2013: $18,284,000,000 March 2014: $19,144,000,000 Total Dwelling: $73,529,000,000 Business: June 2013: $67,126,000,000 September 2013: $67,533,000,000 December 2013: $65,440,000,000 March 2014: $64,720,000,000 Total Business: $264,819,000,000 Changes in Inventories June 2013: $177,000,000
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