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What are your recommendations to a government experiencing a falling level of output increasing level of unemployment and inflation?
Mixing Political Theory with Economic Theory has always been, well, a bad mix. The government should do what it takes to get re-elected as always they do. So, perception of doing the right thing is very important even if it is the wrong thing. Let someone else stick their neck out and say the right thing that doesnt get them elected. Nobody wants to hear NO. So they must say yes, and look like they are doing something positive. Try not to let any mud stick, so pass off the mud to the next player. Watch where you step. Of course if you ask what should a government be doing is completely different asnwer!
What else can I help you with?
When your country is experiencing inflation the government may try to control it by?
Yes government tries to control the inflation by increasing the supply into the market, this balances the demand supply curve
How does the federal reserve monetize debt?
The FED monetizes debt by printing money. Then using that money to purchase government bonds. The bonds are sold as a method of covering deficit. The problem lies in the fact that when this happens it causes Aggregate Demand to increase and results in inflation. If the government continually does this, it traps the monetary system into a spiral of increasing inflation and increasing unemployment.
What is the relationship between inflation unemployment and Real GDP?
The relationship between unemployment and GDP is called Okun's law. It is the association of a higher national economic output with the decrease in national unemployment. This is because in order to increase the economic output of a country, people will need to go back to work, thus lowering unemployment. Empirical studies on the relationship between GDP and unemployment show that for every percentage point fall in the unemployment rate there is an increase in GDP by 2.5 percent. Experts believe that the reason for this large coefficient is because the unemployment rate does not count discourages workers who obtain a job before they are counted in the unemployment numbers. Another reason is when economic output increases firms typically don't hire new workers but have their current workers work for longer hours. Also some industries have increasing returns to scale where increasing the labor force has a multiplicative effect on their output.
Which measure did the U.S. government take to combat the problems of increasing oil prices?
increasing taxes on oil
Which action has an expansionary effect on the economy?
Increasing government spending
What was the importance of the stagflation in 1970?
Stagflation was the combination of increasing inflation and unemployment that the US was experiencing. It was occurring because OPEC placed a trade embargo for oil on the US because the US had supported Israel in a war against Iraq.
When your country is experiencing inflation the government may try to control it by?
Yes government tries to control the inflation by increasing the supply into the market, this balances the demand supply curve
What are the goals of Occupy Wall Street movement?
Their goal is to protest against the policies of the government of United States that is resulting in the crash of the market and increasing Unemployment in the country.
What do the Mississippi and Amazon rivers have in common?
Both are facing increasing pollution. Both are experiencing a loss of biodiversity.
why in the Pakistan unemployment?
Unemployment rate in Pakistan is increasing because of poor economic policies of Pakistani government. Pakistani government is imposing maximum tax on industrial sector which is leading to less investment and closure of many industries which ultimately leads to unemployment.
What effect do labor unions have on the unemployment rate?
The greater the unemployment benefits, the longer one will stay unemployed. This may also increase the number of people that will become unemployed; thereby increasing the unemployment rate.
How does the federal reserve monetize debt?
The FED monetizes debt by printing money. Then using that money to purchase government bonds. The bonds are sold as a method of covering deficit. The problem lies in the fact that when this happens it causes Aggregate Demand to increase and results in inflation. If the government continually does this, it traps the monetary system into a spiral of increasing inflation and increasing unemployment.
What is Sarah Jewett suggesting when she writes about Sylvia's increasing attraction to the hunter increasing attraction to the hunter in A White Heron?
i believe that sarah is experiencing falling in love foe the first time. what do you think?
If research is restricted then the new discoveries made are limited. Which action would most likely increase the number of discoveries scientists can make?
Increasing government funding of research
Is two child policy needed in the Philippines?
yes! cause As of now, Philippines is experiencing a problem, that is overpopulation. Philippines should adopt this policy to avoid increasing of populationJyes! cause As of now, Philippines is experiencing a problem, that is overpopulation. Philippines should adopt this policy to avoid increasing of populationJ
What has government done to solve unemployment?
It depends which country's government you are referring to. Many governments do not accept that it is their position to solve unemployment and have taken no measures. Others have huge bureaucratic organisations, publicly funded, and are the major employers within the country.
Why does government want to have low unemployment?
Unemployment affects the economy and its people through output and distributional effects; The output effects pertain to the productive capacity of the economy as a whole and include: The creation of a GDP gap, which inhibits growth by leaving the economy 'under employed'. This means that the full economic potential of the economy is not being utilised because of a labour deficiency, thus eroding the living standards and the level of economic activity (All other things being equal). Furthermore it creates a loss of production possibilities, that is, the economy is not producing to its fullest potential, which in turn, lowers the future prospects of increased economic performance. There is also an opportunity cost associated with unemployment, in that those unemployed labour resources could be more productively allocated for he benefit of the macroeconomy. Furthermore, there is a social dimension, as unemployment creates social problems, characterised by an inequality of sacrifice. These problems have occurred historically in periods of Depression, such as The Great Depression, in which unemployment reached 29% in Australia. Unemployment, all other things being equal, places greater stress on social services and welfare, and thus creates distortions in resource allocation, insofar as government expenditure on welfare increases which generally pilfers funding for government investment, etc. Distributional effects refer to the disparities and social equity issues unemployment creates, for example, long term unemployment often requires people to draw on their savings to finance living expenses, and hence, aggregate savings fall (All other things being equal). The ramifications of this are significant, in that it creates long term financial difficulties. Furthermore, the income hierarchy is not equally affected by unemployment, with historical periods showing us that demand deficient unemployment has a greater effect on lower income earners (The working classes and unskilled people). This disparity exacerbates social divisions, which, in the government's context is politically volatile and dangerous. So, now I've gone through the ramifications of unemployment, it is apparent that elevated levels of unemployment (Mainly caused by demand deficiency) have inherent and negative social consequences as well as macroeconomic repercussions all of which are undesirable. As I have gone through, unemployment also places a notable strain on government revenue (With tax receipt theoretically decreasing coupled with increasing welfare liabilities.) Therefore, there is an issue pertaining to macroeconomic management as well as political perception, and it is unsound for a government to neglect unemployment. The social problems created are likely to decrease public support for a government and more importantly, the macroeconomic credentials of the government are likely to be compromised. It is , therefore advisable for a government to maintain a rate of unemployment close to the 'natural rate of unemployment' which is defined as a circumstance in which there is no cyclical (demand deficient) unemployment, and the only recurrent unemployment figures are related to frictional unemployment or structural unemployment (both of which theoretically are economically beneficial in the long term). This natural rate was originally defined as 6%, however, the increasing mechanisation of the economy increases accessibility, lowering it to around 4.5-5%. This figure, however, is different in different countries. I hope that answers your question thoroughly enough.
