Thursday 30 April 2009

Carry on what i did yesterday

Cause of economic growth
  • component of AD in the short run
  • AS in the long run
  • could write with reference to all policies.

Achievement of supply side

  • economic growth
  • capital investment
  • low unemployment
  • advance technology manufacture
  • living standard
  • productivity
  • international trade position
  • wage

benefit of Budget deficit

  • government spending on capital investment that bring potential benefits in the long run
  • if increases in public sector such as health, education, it will increase labour productivity and employment.
  • A tool of demand management.Maintaining a high level of demand and keep unemployment low.

Cost of inflation

  • Menu cost
  • shoeleather cost
  • inflation cause inflation
  • fall in the money value
  • fiscal drag
  • uncertainty
  • inflationary noise
  • loss of international competitiveness

Import controls

  • tariff
  • quotas
  • embargoes
  • red tape

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