The Ramsey Model On Economic Growth And Then Will Analyse How Consumption Is Smoothing During Periods Of War Influenced

ECON 2301 Principles of Macroeconomics Time: Th 7:05 pm – 9:45 pm Synonym: 40512 Section: 023 Room: NRG2 2120

The following chapter summaries are mostly based on the McConnell & Brue text “Economics- 16th Ed.”

In order to discuss the statement in the title, I will first talk about J. M. Keynes and give some general information regarding his life and career. Following I will discuss about Keynes criticism of Say’s Law starting with Aggregate Demand and how consumption together with investment are in relation to income. Afterwards I will highlight the role of investment and what the policy implications are. For the final part of this essay I will conclude with some evidence to support the claims made.

Prior to World War II, the United States had entered into the Great Depression 1929-1939. The Great Depression was a hard time in the United States causing many businesses to lay off workers, and possibly close up shop. Before the End of the Great Depression the United States entered into World War II. The Economy is complete garbage at this time, how are we supposed to support a war that isn’t even being fought here at home. Could this war possibly be the end of the United States completely destroying the economy beyond repair? What lasting effects did the War have on the Economy? Coming to the conclusion of the World War II ending the Great Depression for the United States and securing our future for prosperity.

An increased spending by the military can engender some positive advantage via creation of employment as well as extra growth of the economy in addition contributing to the development of technology. This might give a multiplier effect which then gush on to other businesses. By looking into the state of the economy at each and every major conflict since world war II, it is prudent that the positive effect of a rise in military spending were overshadowed by longer term unintentional negative macroeconomic cost. As the stimulatory effect of military expenditure is evidently associated with boost in the growth of the economy, unpleasant effects turn up either immediately or later on, even if

As soon as there was man, there was war. The history of warfare can be traced all the way back to one of the earliest known civilizations, Mesopotamia. Since the development of organized city states warfare has been used to settle disputes including disagreements over land, resources, and religious beliefs.

Macroeconomics 102 was an exciting course after taking Microeconomics 101 as a foundation helped with a better understanding of macroeconomics 102. The course opened my eyes to learn how Economists think of the world, paying attention to the choices made by people also economic activities that could lead to a downturn or growth. The most notable improvement for me is the critical thinking and analyzing each week’s subject using economic views on employment, unemployment, inflation, economic growth and a nation’s national deficit.

o Wealth-maximization model that takes externalities into account. Potential improvement (not actual payment) is required.

War has influenced economic history profoundly across time and space. Winners of wars have shaped economic institutions and trade patterns. Wars have influenced technological developments. Above all, recurring war has drained wealth, disrupted markets, and depressed economical growth.

It is important that people using the models developed by economists know and understand these assumptions because rational individuals need to make their consumption choices maximize their happiness or utility (Mankiw & Taylor, 2006). And many economic research, like demand and supply, is to find equilibrium point which can maximize the all individuals’ benefits and utility without considering other

Economics is a tool that we use in our daily lives even if we don’t always realize it. As people we all have things that we want, and things that we need. This includes things like food, clothing, and shelter, but it is not limited to those things. In order to get those things, people have to spend money. The issue is that everything that people need and want costs money. More often than not, people do not have the money to do both so they have to decide which things are important for them to have right now. This does not only apply to families, but businesses as well. This paper will address different types of economics and some of the factors that contribute to its changes.

(iii) The Hicks demand analysis is based on the assumption that the consumer will always behave rationally to increase his/her satisfaction from a given income to the most. The demand theorem is superior since it completely dispenses with the assumption that the consumer always increases his/her satisfaction, & makes no use of the doubtful hypothesis like the Law of Diminishing Marginal Utility or the Law of Diminishing Marginal Rate of

Eyeballing any cross sectional data on growth across countries shows that countries grow at different rates. Many theories try to explain this phenomenon with emphasis with capital accumulation being one of them. I will start by developing the standard neoclassical growth model as developed by Solow(1956)[1]. I will then proceed to discuss the extensions that have been made to this basic model in an attempt to better understand actual growth figures, for e.g. the standard neoclassical model cannot explain the magnitude of international differences in growth rates. Mankiw[2] points out that “the model can explain

Within the field of economics, the utility maximization problem represents an attempt to quantify the rationale used when consumers attempt to maximize the satisfaction, or utility, they derive from the purchase of goods. With the typical predetermined budgetary restriction imposed on the process, consumers must balance their own limited funds against their desire to obtain certain items. This means that the eventual level of utility received from all potential affordable packages, and thus the consumer's optimal choices, can be expressed via the equation x(p, w), where p is equal to a good's price and w is equal to the consumer's wealth. The price of any given product must be considered during any attempt to answer the utility maximization problem, because if , then u must be continuous and no goods can be obtained free of charge (McEachern, 2010). In other words, because the two rules dictating the boundaries of utility maximization within a two-good model clearly state that the marginal utilities per dollar must be equal and the consumer's entire budget must be exhausted, the inclusion of goods which can be obtained free of charge skews any conclusions regarding the consumer's eventual utility. A good which costs nothing will always provide more immediate happiness than one which costs money, and this fact prohibits economists from effectively modeling any two-good comparisons between free and for cost items.

Historians can’t agree upon when the first war was fought. However, there are evidence of civilization as old as 3000 B.C in conflict with each other. War has been an important factor in creating states and empires throughout history and, equally so, in destroying them. While one may argue the positive effects of war on economy, the miseries it brings to human life can’t be denied. Wars are carried out on the battlefield by armies comprised of soldiers of the contending nations. Irrespective of which side they are on, soldiers bear the most punitive impact of war. Soldiers stay under constant threat to their lives in war zone. They don’t not know if the next bullet has their name of it. This constant danger puts them under severe stress at all time. The knowledge and guilt of killing someone is not the same as watching a war movie with gory details on TV. It takes a lot of mental strength to fire bullets and throw bombs at living people. Seeing dead and dismembered bodies everyday can play havoc on one’s mental health. The harsh conditions of war also adds to soldiers’ miseries. They stay alone for months away from family in unknown places. The loneliness and isolation nibbles away their peace. The expectations of the nation and family add to their stress. In the book, The Things They Carried, Tim O’Brien explains how members of the Alpha Company used different way of coping with the war and continuing to hump on and on. Multiple accounts of the various coping mechanisms