economy by households‚ firms‚ government and the foreign sector. AD = C + I + G + X - M consumption investment government spending exports imports DERIVATION OF THE AGGREGATE DEMAND CURVE Suppose the general price level falls‚ ceteris paribus. THREE things will happen… “all other things remain the same” If the general price level falls… • Lower prices give households greater liquidity (consumers will have more cash to spend). • Less money will need to be borrowed. • Interest
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aspects of this that are price competitive. The first factor I’ll look at is the real exchange rate and effective exchange rate. The real exchange rate is the nominal exchange rate multiplied by the ratio of relative prices between two countries. Ceteris paribus‚ there will be a depreciation in the real exchange rate when either the nominal exchange rate falls or when a trading rival has a higher relative rate of inflation. This makes exports cheaper in foreign currency terms‚ and imports relatively more
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1. Explain economics? Economics is the study of how society allocates scarce resources and goods. Resources are the inputs that society uses to produce output‚ called goods. Resources include inputs such as labor‚ capital‚ and land. Goods include products such as food‚ clothing‚ and housing as well as services such as those provided by barbers‚ doctors‚ and police officers. These resources and goods maybe be considered scarce because of society’s tendency to demand more resources and goods than
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I do not own any rights. This is from my school book. Chapter 1 – What Is Economics? A Definition of Economics Our inability to satisfy all our wants is called scarcity. The choices that we make depend on the incentives that we face. An incentive is a reward that encourages or a penalty that discourages an action. Economics is the social science that studies the choices that individuals‚ businesses‚ governments and entire societies make as they cope with scarcity and the incentives that
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“Unavoidable” Global Bacon Shortage Bacon fans might want to hog as many strips as possible this year because a global pork shortage in 2013 is now being called “unavoidable.” With the number of pigs slaughtered expected to decline by as much as 10 percent in some regions‚ prices of pork are slated to skyrocket‚ according to England’s National Pig Association. The pork price increase comes mostly as a result of droughts in agricultural areas of the US this year. As temperatures rose and crops
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ECONOMIC LAWS Concept of Law: Law means “rule or conduct”. A law expresses the causal relationship between two sets of phenomenon. Like other sciences‚ economics also collects facts and undertakes their systematic study. The facts are analysed and conclusion drawn. These conclusions establish causal relationship between the concerned facts. These are called laws or generalisations. Collection of facts ⇨ Systematic Study of facts ⇨ Establishment of facts ⇨ Analysis of facts ⇨ Conclusion has
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demand depends on the price of the commodity. Hence‚ the higher the price of an article‚ the lesser will be the demand of a rational consumer; other things remaining constant. This assumption of – other things remaining constant – is known as the ceteris paribus. This relationship between the price and quantity bought when expressed in a tabular format is known as the demand schedule. There is an inverse relationship between the price and demand for a product.
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Market Equilibrium & Government Intervention CORE 001 INTRODUCTORY ECONOMICS GROUP 2 PROJECT REPORT Prepared for: Prof Tan Swee Liang LYDIA LOW NGUYEN NHAT QUANG ZHANG HONG BRIEN KEITH SEAH Case 1: Shortage of Civil Engineers in India This article highlights how India‚ the world’s new “high-tech” titan‚ is facing the problem of poor infrastructure due to a lack of civil engineers. Our group examined several factors that could have led to the shortage as well as analyzed the effects of
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References: Briscoe‚ D‚ Schuler‚ R‚ and Claus‚ L 2009‚ International Human Resource Management‚ 3rd edition‚ Routledge‚ London Definition of ’Ceteris Paribus ’‚ 2013.Investopedia‚ Viewed 5th May‚ 2013‚ Eiteman‚ D K Stonehill‚ A 2010‚ Multinational Business Finance‚ 12th edition‚ Pearson Eductaion Inc‚ Boston Haas‚ H & Nüesch‚ S 2012‚ Are multinational teams more successful?‚ The International Journal
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Unit 1 a) Is economics a science? Yes ! The word “Economics” is derived from the Greeks word “Oikonomos” which means to manage the house. So it means the management of a household especially in those matters‚ which are relating to the income and expenses of the family. After sometime‚ the term economy was adopted. Economics is regarded as a Social SCIENCE and not a PURE science like Physics or Chemistry because it uses scientific methods to build theories that can help explain the behaviour
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