Describe the terminology of macroeconomics including GDP, GNP, national income business cycles, monetary policy, fiscal policy, inflation and unemployment
Macroeconomics is a broad sub-field of economics that establishes the behavior, outlook and structure, collective and established decision making system of an economy at large and usually involves national economies, regional and global economies with little or no involvement of the individual markets.
Gross National Product is a determining tool in macroeconomics that measures a nation’s economy and status through international investments and residents working over-seas. GNP excludes any ...view middle of the document...
Business cycles have consequences of short-run and long-run fluctuations of national income that increases or decreases income of a nation all that macroeconomics explains.
Apply the concepts of choice and opportunity costs to basic situations involving scarcity and choice
Scarcity, choice and opportunity cost make the basic ideological explanation of economy and human wants. Individuals continually seek for satisfaction and the major limitation is that there is never a satisfactory approach to their needs all because of limited resources. Therefore there is need to define the available resources before planning on the best choices of wants to fulfill. All economic levels have limited resources to satisfy the ever rising demand and human wants. The limited available resources are therefore to be used in an emphatic way in order to provide the basic opportunity gratification of sustaining wants.
Scarcity is necessitated by opportunity cost and choice. It is the best alternative one comes up with when comparing item costs and the most probable cheaper yet appropriate choices. It is essential when one needs to evaluate the cost and the best available beneficial choices. Opportunity cost applies in consumer choice on a range of contradictory evaluations, possibility of production and career choices with the best outputs after venture. In situations of scarcity, an analysis of the fitness of the available choices gives an individual an alternative for competitive advantage and reduced capital costs.
For instance, a given course is offered in a University within the Town at £29000 while the same course is offered by another institution in the countryside at £3000. The fact that the course is only offered by these two institutions defines scarcity and an opportunity cost analysis should be done so as to pick the best choice on the institution to take the course from of which is that in the countryside.
Analyse and distinguish the concept of aggregate demand, aggregate supply and macroeconomic equilibrium
Aggregate demand, also called Domestic Final Demand, is the summed demand for all goods and services provided in a business economy in a time-span. The demand is always referred to the GDP and it determines the volumes of goods that are purchased. It is normally represented using a Curve that defines aggregate price level and the demanded outputs.
Aggregate supply is also called Domestic Final Supply. It is the combined supply of all goods produced and services offered in a national economy at a given time. The Aggregate demand-Supply curves are used in the analysis of economic fluctuations. Aggregate Supply highlights the amount of goods that industrial firms decide to produce and their final sales while Aggregate demand show the amount of goods that individual industries and the government purchase at all levels of production
The long run aggregate supply curve is usually vertical indicating a continuous...