Ec 301 Midterm
Midterm Intermediate Macroeconomics
1. How are presidential election outcomes related to the performance of the economy?
Presidential elections and the economy have a very close relationship and they go together hand and hand. Usually when the economy is good and opinion of the government is positive, the incumbent or the party of the last president wins the election. People tend the lean towards why change a good thing.
A couple of theories exist in the relationship of the economy and presidents. The first one is that voters will vote for whichever president they feel shares the same economic vales that they have. Usually the poor vote liberal or for bigger government because they think they will provide more economic relief them and their families. The second theory is that the president currently in power will attempt to pass policies that will allow their party to stay in power. So, presidents on their first term will make monetary and fiscal policies close to the election year to stimulate the economy to sway voters.
Two examples of how the economy can sway the presidential election against an incumbent are Hoover and George H.W. Bush. Both presidents had economic downturns during their first term in office and were not reelected. Other factors play key roles in presidential elections, but none are bigger than economics.
2. Discuss the difference between Microeconomics and Macroeconomics. Microeconomics is the study of decision making undertaken by individuals (households) and by business firms. Micro looks at the decisions of individual’s actions, like deciding to work overtime or not. Another example is a small business decision on how much to spend of advertising cost. Micro focuses on the supply and demand in an economy, and how businesses can maximize profits. Macroeconomics is the study of the behavior of the economy as a whole. Macro deals with national items like the unemployment rate, government budget deficit, and money supplied by the
1. How are presidential election outcomes related to the performance of the economy?
Presidential elections and the economy have a very close relationship and they go together hand and hand. Usually when the economy is good and opinion of the government is positive, the incumbent or the party of the last president wins the election. People tend the lean towards why change a good thing.
A couple of theories exist in the relationship of the economy and presidents. The first one is that voters will vote for whichever president they feel shares the same economic vales that they have. Usually the poor vote liberal or for bigger government because they think they will provide more economic relief them and their families. The second theory is that the president currently in power will attempt to pass policies that will allow their party to stay in power. So, presidents on their first term will make monetary and fiscal policies close to the election year to stimulate the economy to sway voters.
Two examples of how the economy can sway the presidential election against an incumbent are Hoover and George H.W. Bush. Both presidents had economic downturns during their first term in office and were not reelected. Other factors play key roles in presidential elections, but none are bigger than economics.
2. Discuss the difference between Microeconomics and Macroeconomics. Microeconomics is the study of decision making undertaken by individuals (households) and by business firms. Micro looks at the decisions of individual’s actions, like deciding to work overtime or not. Another example is a small business decision on how much to spend of advertising cost. Micro focuses on the supply and demand in an economy, and how businesses can maximize profits. Macroeconomics is the study of the behavior of the economy as a whole. Macro deals with national items like the unemployment rate, government budget deficit, and money supplied by the