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ECONOMICSISSUES
Unemployment:
When unemployment rates are high and steady,
run
-
there are negative impacts on the long
economic growth. Unemployment wastes
resources, generates redistributive pressures and
distortions, increases poverty, limits labor
mobility, and promotes social unrest and conflict.
Balance of trade/payment:
currency
influences
balance of trade
The
exchange rates through its effect on the supply
. When a
foreign exchange
and demand for
—
country's trade account does not net to zero
—
that is, when exports are not equal to imports
there is relatively more supply or demand for a
which influences the price of
country's currency,
that currency on the world market.
Inflation:
Inflation is a sustained rise in overall price levels.
Moderate inflation is associated with economic
growth, while high inflation can signal an
are three effects of
There
economy.
overheated
Decrease in the value of the dollar,
inflation:
Interest rate in loans.
Decreasing real returns on saving.
Corruption:
Corruption is a main threat in many countries
around the world. Therefore, the causes and
corruption are analyzed in
consequences of
Main causes for
.
various empirical studies
corruption are according to the studies (1) the
size and structure of governments, (2) the
democracy and the political system, (3) the
quality of institutions, (4) economic
ness of economy, (5) salaries of
freedom/open
civil service, (6) press freedom and judiciary, (7)
cultural determinants, (8) percentage of women in
the labor force and in parliament (9) colonial
heritage and (10) the endowment of natural
.
resources
Poverty:
entails more than the lack of income and
Poverty
productive resources to ensure sustainable
livelihoods. Its manifestations include hunger and
malnutrition, limited access to education and
other basic services, social discrimination and
ck of participation in
exclusion as well as the la
making. Various social groups bear
-
decision
.
disproportionate burden of poverty
Infrastructure:
When infrastructure are not operating properly,
the chain of product is disrupted .This disruption
omics
hinders development, which cause econ
deflects and, in turn, brings low standards of
living.
Price Instability:
Fundamentally, price stability preserves the integrity and
purchasing power of the nation's money. When prices
are stable, people can hold money for transactions and
other purposes without having to worry that inflation will
eat away at the real value of their money balance.
Currency Exchange:
Money laundering harms financial sector institutions
critical to economic growth. Money laundering promotes
crime and corruption that slows economic growth and
decreases productivity in the real sector economy.
Money laundering is a problem both in the world's major
financial markets both in emerging markets.
Debt Issue:
Growing debt also has a direct effect on the economic
opportunities available to every American. If high levels
of debt crowd out private investments in capital goods,
workers would have less to use in their jobs, which
would translate to lower productivity and, therefore,
lower wages.
Health Issue:
At a societal level, poor population health is associated
with lower savings rates, lower rates of return on capital,
and lower levels of domestic and foreign investment; all
of these factors can and do contribute to reductions in
economic growth.
Poor Standard of living:
Faster growth in gross domestic product (GDP) expands
the overall size of the economy and strengthens fiscal
conditions. Broadly shared growth in per capita GDP
increases the typical American's material standard of
living.
Education System:
Education tends to raise productivity and creativity, as
well as stimulate entrepreneurship and technological
breakthroughs. All of these factors lead to greater output
and economic growth.
Energy Crisis:
In short, energy is vital for running all the resources and
energy crisis directly influence all the sectors of
economy such as agriculture sector, industrial sector,
unemployment, poverty, lower GDP and higher inflation.
Climatechange:
The frequency and intensity of extreme weather, both in
the U.S. and in other countries, can damage factories,
supply chain operations and other infrastructure, and
disrupt transport. Drought will make water more
expensive, which will likely affect the cost of raw
materials and production.
Dependence on Agricultureproducts:
As agriculture grows rural incomes rise but not as fast
as incomes in the rapidly growing non- agricultural
economy, widening the rural-urban income disparity. ...
But as agriculture's share of GDP declines to about 15
percent, countries have shifted from taxing to
subsidizing agriculture.
Unskilled Labor:
Labor represents the human factor in producing the
goods and services of an economy. Finding enough
people with the right skills to meet increasing demand.
This often results in rising wages in some industry.
Ease of doing business:
There are several factors that are crucial to ease of
doing business, however, i will list few of them:
Good government policy.
Stable power supply.
Availability of raw materials.
Political stability.
Availability of labor.
Availability of land/space etc.
Poor monetary policies:
Monetary policy impacts the money supply in an
economy, which influences interest rates and the
inflation rate. It also impacts business expansion, net
exports, employment, the cost of debt, and the relative
cost of consumption versus saving—all of which directly
or indirectly impact aggregate demand.
Political Instability:
Political instability is likely to shorten policymakers'
horizons leading to sub- optimal short term
macroeconomic policies. It may also lead to a more
frequent switch of policies, creating volatility and thus,
negatively affecting macroeconomic performance.
Governance Issue:
Good governance at all levels is fundamental to
economic growth, political stability, and security — a key
factor for stability and security. Good governance leads
to improved economic benefits in a globalized world and
it accelerates economic transitions.
Research & Development:
The broader literature suggests that research and
development expenditure positively impacts total factor
productivity (TFP) by increasing output per worker.
However, there are few studies that look at the impact of
research and development on gross domestic product
(GDP) per capita.
EconomicGrowth:
As the country's GDP is increasing, it is more productive
which leads to more people being employed.
This increases the wealth of the country and its
population. Higher economic growth also leads to extra
tax income for government spending, which the
government can use to develop the economy.

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MACRO ECONOMICS.docx

  • 1. ECONOMICSISSUES Unemployment: When unemployment rates are high and steady, run - there are negative impacts on the long economic growth. Unemployment wastes resources, generates redistributive pressures and distortions, increases poverty, limits labor mobility, and promotes social unrest and conflict. Balance of trade/payment: currency influences balance of trade The exchange rates through its effect on the supply . When a foreign exchange and demand for — country's trade account does not net to zero — that is, when exports are not equal to imports there is relatively more supply or demand for a which influences the price of country's currency, that currency on the world market. Inflation: Inflation is a sustained rise in overall price levels. Moderate inflation is associated with economic growth, while high inflation can signal an
  • 2. are three effects of There economy. overheated Decrease in the value of the dollar, inflation: Interest rate in loans. Decreasing real returns on saving. Corruption: Corruption is a main threat in many countries around the world. Therefore, the causes and corruption are analyzed in consequences of Main causes for . various empirical studies corruption are according to the studies (1) the size and structure of governments, (2) the democracy and the political system, (3) the quality of institutions, (4) economic ness of economy, (5) salaries of freedom/open civil service, (6) press freedom and judiciary, (7) cultural determinants, (8) percentage of women in the labor force and in parliament (9) colonial heritage and (10) the endowment of natural . resources Poverty: entails more than the lack of income and Poverty productive resources to ensure sustainable livelihoods. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and ck of participation in exclusion as well as the la making. Various social groups bear - decision . disproportionate burden of poverty
  • 3. Infrastructure: When infrastructure are not operating properly, the chain of product is disrupted .This disruption omics hinders development, which cause econ deflects and, in turn, brings low standards of living. Price Instability: Fundamentally, price stability preserves the integrity and purchasing power of the nation's money. When prices are stable, people can hold money for transactions and other purposes without having to worry that inflation will eat away at the real value of their money balance. Currency Exchange: Money laundering harms financial sector institutions critical to economic growth. Money laundering promotes crime and corruption that slows economic growth and decreases productivity in the real sector economy. Money laundering is a problem both in the world's major financial markets both in emerging markets. Debt Issue: Growing debt also has a direct effect on the economic opportunities available to every American. If high levels of debt crowd out private investments in capital goods, workers would have less to use in their jobs, which
  • 4. would translate to lower productivity and, therefore, lower wages. Health Issue: At a societal level, poor population health is associated with lower savings rates, lower rates of return on capital, and lower levels of domestic and foreign investment; all of these factors can and do contribute to reductions in economic growth. Poor Standard of living: Faster growth in gross domestic product (GDP) expands the overall size of the economy and strengthens fiscal conditions. Broadly shared growth in per capita GDP increases the typical American's material standard of living. Education System: Education tends to raise productivity and creativity, as well as stimulate entrepreneurship and technological breakthroughs. All of these factors lead to greater output and economic growth. Energy Crisis: In short, energy is vital for running all the resources and energy crisis directly influence all the sectors of
  • 5. economy such as agriculture sector, industrial sector, unemployment, poverty, lower GDP and higher inflation. Climatechange: The frequency and intensity of extreme weather, both in the U.S. and in other countries, can damage factories, supply chain operations and other infrastructure, and disrupt transport. Drought will make water more expensive, which will likely affect the cost of raw materials and production. Dependence on Agricultureproducts: As agriculture grows rural incomes rise but not as fast as incomes in the rapidly growing non- agricultural economy, widening the rural-urban income disparity. ... But as agriculture's share of GDP declines to about 15 percent, countries have shifted from taxing to subsidizing agriculture. Unskilled Labor: Labor represents the human factor in producing the goods and services of an economy. Finding enough people with the right skills to meet increasing demand. This often results in rising wages in some industry. Ease of doing business:
  • 6. There are several factors that are crucial to ease of doing business, however, i will list few of them: Good government policy. Stable power supply. Availability of raw materials. Political stability. Availability of labor. Availability of land/space etc. Poor monetary policies: Monetary policy impacts the money supply in an economy, which influences interest rates and the inflation rate. It also impacts business expansion, net exports, employment, the cost of debt, and the relative cost of consumption versus saving—all of which directly or indirectly impact aggregate demand. Political Instability: Political instability is likely to shorten policymakers' horizons leading to sub- optimal short term macroeconomic policies. It may also lead to a more frequent switch of policies, creating volatility and thus, negatively affecting macroeconomic performance. Governance Issue:
  • 7. Good governance at all levels is fundamental to economic growth, political stability, and security — a key factor for stability and security. Good governance leads to improved economic benefits in a globalized world and it accelerates economic transitions. Research & Development: The broader literature suggests that research and development expenditure positively impacts total factor productivity (TFP) by increasing output per worker. However, there are few studies that look at the impact of research and development on gross domestic product (GDP) per capita. EconomicGrowth: As the country's GDP is increasing, it is more productive which leads to more people being employed. This increases the wealth of the country and its population. Higher economic growth also leads to extra tax income for government spending, which the government can use to develop the economy.