Abstract
Main components of macroeconomics are Inflation and unemployment. Inflation is the falling the power of purchasing and raising the production cost of production. When the people who have no job and they are searching for job then Unemployment happens. Additionally, inflation and unemployment have a relationship with negative. All the component of macroeconomics are interconnecting and while examining one must concern each and every component with equal concern. In the case of UAE economy, inflation is increased when we compared with that past. If we analyse the economic condition of our country it is clear that inflation is higher in recent years comparing with past decade. Simultaneously, with inflation, the rate of unemployment is
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Effects of inflation are market inefficiencies, and create complicate for firms to plan long-term finance. Inflation can serve as a burden on productivity as organizations are compelled to change resources away from products and services for targets on profit and losses from inflation of currency. Concern about the power of purchasing in future of money depresses investment and saving and inflation can charge hidden tax raises. Higher inflation in one economy than another will lead to the exports of first economy to become more costly and impact the trade balance in trading …show more content…
Iran, Oman and Saudi Arabia have some of the highest unemployment rates of the countries that border UAE all over 10%. Qatar has remained steady the past two years with a .5% unemployment rate mainly due to its small population and diversified economy (CIA -World Factbook). Diversification has been the focal point of the UAE for the past few years. In an attempt to release itself from total dependence on oil, UAE has begin development of new plants and factories. UAE has also increased spending on job creation and enforcing the rights of its labor force (CIA-World Factbook). Education has also been receiving more attention with the development of secondary education institutions and a number of fine institutions of higher learning have begun to be established. With the development of new plants and factories, economic recovery, and emphasis on education and entrepreneurship, the UAE has begun the processs of creating more job for its
Macropoland, a natural gas and oil importer, has a natural rate of unemployment of about 4.5% and a long run average rate of inflation of about 2%. However, there are two specific time periods where these rates fell below their potential. During the period between 1973-1974, the country had an inflation rate of about 15%, with an unemployment rate of nearly 13%. And now, they are experiencing an unemployment rate of 9% and an inflation rate of 0.4%. As their new economic advisor, it is my job to explain these two time periods.
In conclusion, the current macroeconomic situation in the United States is characterized by moderate growth because of better economic conditions that were brought by the events of 2013. The country has experienced moderate economic growth since the 2008 global recession but has shown real signs of momentum. While the country is not concerned about recession or inflation, the rate of unemployment is still a major challenge despite improved consumer and business confidence. As a result, the Federal Open Market Committee or Federal Reserve System needs to adopt fiscal and monetary policy initiatives that help address the unemployment issue and promote high economic growth.
The trends in unemployment affect three important macroeconomics variables: 1) gross domestic product (GDP), 2) unemployment rate, and 3) the inflation rate.
Yes, it will increase inflation but create more job opportunities and unemployment will decrease if government intervention occurs. Yes in the long run this might be bad but people care about tomorrow more than they care about 3 or 4 years from now or even more. As Lord Keynes once said “in the long run we are all dead”.
Richard J. Braxton is a Ph.D., Director, at Innovation Center –Index Shared Services. The aim of his article is to understand the problem of youth unemployment in the Gulf Cooperation Council region and how best the government can critically address this issue. He gave several options that can be clear solution to the problem. His emphasized that the GCC countries need to adopt effective training and development programs to provide the unemployed youth with the knowledge, skills, and abilities in order for them to compete for job vacancies.. The article also gave many facts elaborating more on the issue, so that his audience gets more interested and engaged in the topic. The articles outlines so many important steps to be considered by the government, and...
In the study of macroeconomics there are several sub factors that affect the economy either favorably or adversely. One dynamic of macroeconomics is monetary policy. Monetary policy consists of deliberate changes in the money supply to influence interest rates and thus the level of spending in the economy. “The goal of a monetary policy is to achieve and maintain price level stability, full employment and economic growth.” (McConnell & Brue, 2004).
This article by Andrew McCathie posted in EarthTimes and titled “European inflation climbs unemployment at 12-year high was posted on Friday July 30 2010. The article reports that food and energy costs have played a critical role in driving up inflation in the 16-member eurozone. The rates of unemployment remained stagnant to its highest level during this time.
Economists distinguish between two types of inflation: Demand-Pull Inflation and Cost-Push Inflation. Both types of inflation cause an increase in the overall price level within an economy. Demand-pull inflation occurs when aggregate demand for goods and services in an economy rises more rapidly than an economy’s productive capacity. One potential shock to aggregate demand might come from a central bank that rapidly increases the supply of money.
=== A study of economics in terms of whole systems especially with reference to general levels of output and income and to the interrelations among sectors of the economy is called macroeconomics. Macroeconomics is concerned with the behavior of the economy as a whole—with booms and recessions, the economy’s total output of goods and services and the growth of output, the rates of inflation and unemployment, the balance of payments, and exchange rates. Macroeconomics deals with the increase in output and employment over long period of time—that is economic growth—and with the short-run fluctuations that constitutes the business cycle. Macroeconomics focuses on the economic behavior and policies that effect consumption and investment, trade balance, the determinants of changes in wages and prices, monetary and fiscal policies, the money stock, the federal budget, interest rates, and national debt. In brief, macroeconomics deals with the major economic issues and problems of the day.
Inflation and unemployment are two key elements when evaluating a whole economy and it is also easy to get those figures from National Bureau of Statistics when you want to evaluate it. However, the relationship between them is a controversial topic, which has been debated by economists for decades. From some famous economists such as Paul Samuelson, Milton Freidman etc to some infamous economists, this topic received a lot of attention. However, it is this debate that makes the thinking about it evolve. In this essay, the controversial topic will be discussed by viewing different economists’ opinions on that according to time sequencing. But before started, it is worthy getting a better understanding of the terms, inflation and unemployment.
In the last couple of years, Qatar has prospered with continued high real GDP growth. The real GDP growth rates for the previous three years were respectively 6.6%, 13% and 16.7%. Qatar recorded the lowest unemployment rate among the population in the Arab world by 0.5% during 2012. The overall Qatar’s revenue in 2012 was $69.76 billion and its expenditure was $49.32 billion. The inflation rate was 1.9% (2012 est.). All these information show that Qatar has a good wealth as it is mentioned before and this wealth is expected to grow sharply due to the Qatar Bahrain causeway and the World Cup which is going to be in 2022.
Inflation is defined as an increase in the expected price level and has been the signal for an improving economy, but it has also weakened an economy due to the unemployment it usually produces which usually hurts the Middle class the most. A healthy rate of inflation means an expanding economy due to higher tax revenues for the government and higher wages for businesses that are booming due to the high demand of their products. But if inflation surpasses of what is expected than employer will have to reduce wages to meet these new prices. When the Federal Reserve creates inflation most argue that this is robbing people of the money that they have saved because they have to use it due to the rise in prices. Printing
Macroeconomics is the study of the economy as a whole, which looks at economic growth, unemployment and inflation. (Dobson and Palfreman, 1999) Government macroeconomics objectives can dividend into
As an aftereffect of inflation, the purchasing power of a unit of money falls. For instance, a pack of gum that costs $1 and if inflation rate is 2% then in a given year will cost $1.02 the following year. As products and services require more cash to buy, the implicit value of that currency falls.
Inflation is one of the most important economic issues in the world. It can be defined as the price of goods and services rising over monthly or yearly. Inflation leads to a decline in the value of money, it means that we cannot buy something at a price that same as before. This situation will increase our cost of living.