Household final consumption expenditure

This report will examine the relationships between components of aggregate expenditure and how fluctuations in those components eventually leads to changes in monetary policy. The recent performances of the Australian economy over the past five years will be examined in order to provide an assessment on where this economy currently is on the business cycle. This will be done through discussing the relevant economic models, such as aggregate demand and aggregate supply. Providing a critical analysis

Unit-1 Q1. Define micro and macro economics, Distinguish between them, and explain the scope, importance and its limitations Ans. modern economy analysis has been divided into two major branches that is micro and macro economics. Micro economics means the economics system which deals individual economics unit on the other hand macro economics means the economics unit which deals aggregate as a whole that is national income, general employment, and total out –put, general price level etc. These two

government in developing countries pun inequality in the policy agenda? High and sustainable economic growth is the main condition for the sustainability of economic development and increase prosperity. As the population increases each year, the consumption is also increasing. Further more, demand, supply and population growth also require employment growth as a new source of income, because if not so then economic growth will lead to poverty. Many economics literatures review the correlation between

country’s output. It is the market value of all final goods and services produced within a given period of time by factors of production within a country. Gross National Product (GNP) is the total market value of all final goods and services produced within a given period by factors of production owned by a country’s citizens, regardless of where the output is produced. GNP vs.

INTRODUCTION Over these 68 years of independence, Indian economy has witnessed a drastic change in the pattern of consumption due to increase in level of income and purchasing power. Post 1991 economic policy reforms, there has been high degree of competition and mass production. There is immense positive change in demand for high end technologically advanced branded goods, stimulated by increased awareness and changing taste and preference spurred by demonstration effect. This would mainly be

The Circular Flow Model Accompanied by Reverse Flows The circular flow model is defined as the flow of resources from households to firms and of products to firms from households. These flows are accompanied by reverse flows of money from firms to households and from households to firms. The circular flow is comprised of the resource market, households, product market, businesses, and the government. Macroeconomics - The study of the aggregate (total) Behavior of the whole economy.

• Micro vs. Macro • Microeconomics – the study of how individual households and firms make decisions and how they interact with one another in markets. • Macroeconomics – the study of the economy as a whole. – Its goal is to explain the economic changes that affect many households, firms, and markets at once. • The Two Groups of Economists • Macroeconomists • Focus on the economy as a whole. • Spend much time analyzing how total income changes and how changes in income cause changes in

aggregate demand and aggregate supply: the long run and the short run, recessionary and inflationary gaps and long-run economic equilibrium, determining the level of consumption and aggregate expenditures and aggregate demand. I have been able to retain that aggregate demand is the total quantity of goods and services that a household, foreign buyers, and governments will buy at a given price level. A shift to the left of the aggregate demand indicates a fall in price, output returning to normal pushing

depreciation in the value of the product), Domestic (within the borders of a country) and Product which simply means a good or service. So what does it all mean when all these three factors are interlinked? GDP is simply the market value of all the final goods and services produced within a country in a given time period – usually a year (Parkin et al. 2005: 438). The definition of GDP is composed of four parts. Firstly, we have to take into consideration the market value of the products. Froyen

For different purpose, the different GDP frames will be used. “Real GDP is the value of final goods and services produced in a given year when valued at the prices of a reference base year; Nominal GDP is the value of final goods and services produced in a given year when valued at the prices of that year. The maximum level of real GDP that can be produced while avoiding shortages of labour, capital, land