Society, economy and politics: an introductory overview, Group: 2
Friday, 10, 2011.
1.-Investigate the following concepts
How does it surges the macroeconomy?
In the eighteenth century, the economists were concerned to study the economic growth, the inflation trade and international payments, in macroeconomicissues. However until 1930, during the time of the Great Depression, the modern macroeconomics came out to the world. In that time of depression, there was a strong stagnation of productive activities and a high level of unemployment.
Who is the father of macroeconomics?
During the Great Depression, John Maynard Keynes appeared, and revolutionized the macroeconomic thinking, to argue that theproduction does not depend on the offer, among other approaches. In 1936, Keynes made his major contributions with his book The General Theory of Employment, Interest and Money.
Describe the 1929 economic crisis
The Great Depression was a severe worldwide depression, that affected principally U.S., during the decade preceding World War ll. In some countries it started in 1929, and in most of all in1930 or early 1940s. This economical depression was the deepest one of the 20th century.
This historial event, began with the New York stock market crash of October 29, 1929. The Great Depression had devastating effects in almost every country of the world, it affected all the social clases in the societies, in some aspects like the personal income, tax revenue, profits and prices. Theunemployment rised to 25%, and in other parts of the world 33%.
What is GDP? (Gross Domestic Product)
Is defined as the market value of the goods and services produced by a certain country in the world, in a period of time.
What is GNP? (Gross National Product)
Its defined as the total value of all the goods a country has produced and the services it has provided in a particular year, including itsincome from investments in other countries.
What is Inflation?
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.
What is fiscal deficit?
When a government's total expendituresexceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits.
What is trade defficit?
Excess of a nation's imports of goods (tangibles) over its export of goods during a financial year, resulting in a negative balance of trade. Opposite of trade surplus.
What is unemployment?
An economic condition marked by thefact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances.
What is CPI (Consumer Price Index)?
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medicalcare. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
What is Fiscal Policy?
Fiscal policy is a tool which is used by national governments to influence the direction of the economy, generallywith the goal of promoting economic health and growth. Fiscal policies can be approached in a variety of ways, and they tend to vary as heads of state change, because different people have their own approaches to economic issues.
The two main instruments of fiscal policy are government expenditure and taxation.
Funds used by a company to acquire or upgrade physical assets such as...