The macro economice

Has government policies

Fiscal policy

Monetary policy

Economic growth

Government regulations

The government has money by tax and borrowing that is how it raises its money

It also has influence on the comony by buying and also taxes

There are policies from the government which also go into the business these may be

Overall economic policy

Industry policy

Environmenet and infrastructure

Social policy

Foreign policy which is export promotios and asl trade promotions

The demand may be changes due to a couple of things such as

Interest rates

Confidence

Savings

The multiplier effect

Inflation

Exchange rates

Agreate demad is the total demand of goods and services in an economy

The include consumption

Investment

Exports and imports

Government spending

These are all in the aggregate demand policy

The formular is AD+C+I+G+(X-M)

THE FISACL POLICY IS ABOUT THE GOVERNMENT SPENDING AND TAX POLICIES TO INCREASE DEMAND
IN A COUNTRY

BY EXPENDITURE PLANNING

REVENUE PLANNING

BORROWING LASTLY AS WELL

MONETARY POLICY

THE MONETARY POLICY USES FACTORS SUCH AS INTREST RATES

EXCHANGE RATES,CREDIT CONTROL TO INFLUEN AGGREAGTE DEMAND

THE MONETARY POLICY CAN BE USED AS MEANS TO ACHIEVE ECONOMIC OBJECTIVES SUCH AS
BALANCE OF TRADE ,FULL EMPLOYEMENT,REAL ECONMIC GRWOTH TO ACHIVE THESE ULTIMATE
OBJECTIVES THEY SHOULD MEET THE INTERMEDIATE OBJECTIVES AS WELL

FOR THE MONETARY POLICY

INTERMEDIATE ARE’INTREST RATES

GROWTH IN THE MONEY SUPPLY

EXPANSION OF CREDIT AND LASTLY ASLO THE GROWTH OF THE NATIONAL INCOME

THE ULTIMATE ONE IS ECONOMIC GRWOTH

BALANCE OF TRADE

ECONMIC GROWTH

FULL EMPLOYEMENT

INFLATION

THRE IS ASLO SOMETHING CALLED QUANTITIVE EASING WHICH IS WHERE WHERE THE GOVERNMENT
PRINTS MORE MONEY HENCE THERE WILL BE INCREASED INCOME AND HANCE PRICES AND SO THIS
WILL STIMIULATE THE ECONOMYMONEY TARGETS ARE THE INTERMEDIATE TARGET OF ECONMY POLCY

MONEY SUPPLY TARGETS

INSRUMENETS OF MONTEARY POLICYS ARE INTREST RATES IF OUR INTREST RATES ARE HIGH THEN WE
MAY SAVE MORE AND THUS LESS SPENDING

ONE OTHER THING IS THE CONTROL OF BALANCE OF TRADE BETWEEN EXPORTS IF THEY ARE TOO
EXPENSIVE THEN WE MAY NOT BYE THEM HENCE NO SPENDING’

ANPTHER IS THE RESERVE REQUIRMNET WHERE BY THE BANK BALANCES THAT CAN BE LEAENT TO
SUCTOMRS CHANGES AND THEY CAN NO LONEGER BE LEARNT MORE HENCE LESS SPENDING
LOW INFLATION HELPS THE ECONMOY BY THAT THEY CAN PLAN BETTER FOR THE FUTURE

THERE IS BUSIENESS CONFIDENCE BY STABLE PRICES

THERE IS A STIMULATES ECONOMIC GROWTH AND COMPETITIVE NESS

THE NATIONAL INCOME AND ECONOMIC GROWTH

AGGREATE DEMAND IS THE TOTAL PLANNES OR DESIRED CONSUMPTION OR ABILITY TO BYE FOR
HOUSE HOLDS

FIRMS

OR THE GOVERNMENET

TOTAL OR DESIRED CONSUMPTION OF HOUSE HOLDS

FIRMS

AND THE GOVERNMENT

MONETARY POLICY

NATIONAL INCOMEMONETARY POL

MONETARY POLICY IS USED TO ACHIVE FULL EMPLOYEMENT

BALANCE OF TRADE

ECONOMIC GROWTH

INFLATION

IT USED ULTIMATE OBJECTIVES OF

GOVERNMENET POLICIES

INCREASING THE NATIONAL INCOME BY FULL EMPLOYEMENT WILL BE WHERE THE QULIBRIEM IS
BALNACED BETWEEN THE TOTAL ad and the total AS

SO OVERALL THE NATION INCOME BY EMPLOYEMENT HAPPENS WHERE THE AD AND AS ARE AT
BALANCE AT THE EQULIBRIUM LEVEL DUE TO THE FIRMS DURING AN ECONOMY DEMAND AT A
CURRENT PRICE PRODUCE OUTPUT TO A CAPACITY WHERE THE COUNTRIES RESOURCES ARE FULLY
UTILIZED

AT A GIVEN DEMAND PRICE THEY PRODUCE RESOUCES TO FULL EMPLOY THEM ALL

EQULIBRIEM INCOME
AGGREAGTE DEMAND IS THE TOTAL DESIRE FOR CONSUMPTION DEMAND IN AN ECO OMY

NATIONAL INCOME CAN COME IN WAYS OF FULL EMPLOYEMENT ASLO E.G

FULL EMPLOYEMENT NATIONAL INCOME

FISCAL POLICY

DEFLATIONARY GAP

WHERE THERE IS ANEMPLOYEMENT OF RESOURCES WAGES AND DEMAND WILL GO DOWNWHERE

THERE ISNT UTLIZATION OF RESOURCES HENCE THERE WILL BE A LOW DEMAND AND ASLO THERE
WAGES WILL DECREASE PEOPLE DO NOT WANT THEIR WAGES TO DECREASE EVEN TEMPORARILY
HEMNCE SO THERE WILL BE A DEFLATIONARRY GAP WHERE PRICES SATY CONSTANT BUT THE OUTPUT
AND DEMAND CHANGES

PRICES ARE CONSTANT WHEN DEMAND AND OUT PUT CHANGES

STAGLATIONS

HIGH PRICES AND INSATBILITY IN SUPPLY WILL LEAD TO HIGH UNEMPLOYEMNT AND HIGH INFLATION

STAGFLATION IS WHERE BY HIGH PRICE SHOCK AND INFLATION LEAD TO INFLEXIBLITY IN SUPPLY WILL
LEAD TO UNEMPLOYAMENT AND INFLATION

PHASES IN THE BUSINESS CYCLERECESSION

DEPRESSION

RECOVERY

BOOM

UNDER RECESSION ACTIVITIES

CONFIDENCE OR DEMAND FALLS

INTORIES LEVELS ARE REDUCED

PROJECTS BEGIN TO LOOK UNPROFITABLE

CAMPANIES ENABLE TO SELL THEIR INEVTORY CAN NOT PAY THEIR DEBTS

IF THERE IS STILL NO STIMULATION A PERIOD PF DEPRECION WILL SET IN

RECOVERY IS USALLY SLOW TO BEGI DUE TO LOW ECONMY CONFIDENCE

HERE DURING THE RECOVERY STAGE FINALLY

THE GOVERNMENT IS USING THE FISCAL OR MNETARY POLICY TO BOOST THE ECONMY

TOGETHER WITH CONFIDENCE THE GOVERNMENET OUTPOT EMPLOYMENT AND LASTLY INCOME WILL
RISE
IINVEST WILL FLOW IN THE ECONMY

ONCE THE OUTPUT HAS RISEN ABOVE THE TRENT LINE THEN THERE WILL ASLO BE A BOOM

DURING THE BOOM

DEMAND INCERESES HENCE THE PRICES WILLASLO RISE

HERE THERE WILL ASLO BE AN INCREASE IN THE EMPLOYMENT RATE

LASTLY THERE WILL BE AN INCREASE IN INWARDS INVESTMENTS INTO THE ECONOMY

MACROECONMIC ACTIVITIES INVOLVE

GOVERNMENT POLICIES

NATIONAL INCOME

FISCAL POLICY

ANS LASTLY THE WILL ALSO BE THE MONETARY POLICY AS WELL

INFLATION AND ITS CONSEQUENCES

INFLATION IS A BIG PROBLEM TO AN ECONMY AS IT BRINGS UNERTANITY OF VALUE OF MONEY TO AN

INCOMY

CHANGING PRICES IMPOSE MORE COSTS AND LASTLY

REDISTRIBUTES INCOME

SO INFLATION HAS A PROBLEM OF THAT CONSTANTLY CHANGING PRCES BRING UNCERTANITY TO

PLANNING BUSINESS

IT REDISTRUBTES INCOME

LATLEY CHANGING PRICES HAVE COSTS

IT REDISTRUBTES INCOME

RISING PRICES HAVE COTS

IT CAUSES UNCERTINATY TO BUSINESS PLANNINGS

A GN=ENRAL RISE IN PRICES AND A DECLINE IN THE PURCHASING POWER AS WELL

EFLATION LOW RATES AND A RECESSION IS ASSOCIATED WITH IT

LIQUIDITY THE EASE WHICH ASSETS CAN BE TURNED INTO MONEY

A ECONMY IN INFLATION ALSO NEEDS DEFLATION HOW EVER DEFLATION TOO NEED INFLATION BUT
DEFLATION HELPS TO ENSURE THAT THE HIGH SUPPLY OF MONEY DOENT HAVE SHORTAGE OF LIQIDITY

WHY IS INFLATION BAD

REDISTRIBUTION OF INCOME AND WEALTH

IN THE ACCOUNT PABALES TO RECIEVES THOSE IN FIXED INCOMES ARE ON THE BETTER SIDE THAN THE
POOR

BALANCE OF TRADE EXPORTS WILL BE INVOLVED COZ IF THERES A HIGH INFLATION EXPORTS WILL BE
MORE EXPENSIVE THAN IMPORTS HENCE THEY WILL LOSS TRADING PATERS HENCE THERE WILL BE
ENEMPLYEMENET EXPRIENCES BY THIS FACTOR

THERE WILL ALSO BE UNCERTANITY IN THE VALUE OF MONEY AND PRICES

MONEY BECAMES WORTHLESS AS NO ONE KNOWS ITS REAL VALUE ANYMORE

REOURCE ALLOCATION IS IMPOSSIBLE AND DECISION MAKING AS WELL

RESOURCE COST OF FREQUENT ARISING PRICESES

ECONOMIC GROWTH AND INVESTMENT

IT WILL AFFECT STANDARDS OF LIVING OF AN ECONOMY

ECONOMIC GROTH AND INVESTMENT

UNCERNTANITY OF THE VALUE OF MONEY

BALANCE OF PAYMENT

RESOURCE COST OF CHANGING PRICES

REDISTRIBUTION OF INCOME

MEASURES OF INFLATION IS MEASURED BY THE PRICE INDECES A BASKET OF ITEMS PRESENTS THE
PURCHASES AROUND THE COUNTRY IS PRICED REGULARLY AND THIS FORMSTHE BASIS OF PRICE INDEX

INFLATION IS MEASURED WITH A PRICE INDEX

A BASKET OF ITEMS IS PRISEC REGULARY ON THE BASIS OF PRICE INDEX

PRICE INDICES

RETAIL PRICE INDEX(PRICES OF ALL GOODS AND SEVICES AND HOUSING COTSS BY CONSUMERS)

CONSUMER PRICE INDEX(EXCLUDES ALL GOODS AND SERVICES BUT NOT HOUSING COSTS

THE FOLLOWING INDECIES SOMETIMES USED

MEASUREMNTS OF INFLATION

WHAT CAUSES INFLATION

DEMAND PULL FACTORS

COSTPUSH

EXPECTATIONS

INCREAE IN THE MONEY SUPPLY

IMPRT COST FACTORS

THE MOST IMPRTANAT ARE

DEMAND PULL AND COST PUSH FACTORS

INDEX RPIX AND RPIY

RPIX UNDERLYING RATES OF TAX

RPIY ADJUSTED FOR ANY TAX VAT CHANGES

RETALILER AND CONSUMER1

RPIX

RPLYCAUSES OF INFLATION ARE DEMAND PULL FACTORS

COST PUH FACTORS

IMPORT COST FACTORS

EXPECTATIONS

EXCESSOVE GROWTH IN MONEY SUPPLY

SUPPLY REACHES LIMIT AT CAPACITY AT FULL EMPLYMENT RATE

WHEN THE DEMAND IS MORE THAN THE SUPPLY IS THE COST PULL Demand which influences the
inflatincost push inflation

Inflation from the cost of production is the cost push inflation

The demand pull inflation only exists when employemnet rate is low
What happens here is thet the aggreagate demand execeed the ability to supply hence prices will rise in
the economy or also the demand for factors of production will also rise e,g waged

This is an increase in the cost of production for goods and the services

ENEMPLOYMENET

RATE OF UNEMPLOYEMENT IN AN ECONOMY CAN BE CALCULATED AS

CAN BE AS NUMBER OF UNEMPLYED OVER THE TOTAL WORK FORCE*100

THE NUMBER OF THE UNEMPLYED IS MEASURED BY GOVERNMENET STATISTICS

IF THE FLOW OF WORKERS UMEPLYED IS CONTSANT SO WILL SIXE OF THE EMPLOYEMENT BE

CONSTANT

THE FLOW OF UMEMPLOYMENT IS THE NUMBER OF WORKING LABOUR BECOMING UMEMPLOYEED

BY REDUDNDACIES

LAYOFFS

VOLUNTARIRILY QUITTING WORK

PEOPLE OF THE LABOUR FORCE JOING UNEMPLYMENT

SCHOOL LEAVERS

REJOING THE WORK FOCE WITHOUT A JOB YET EAITHER MOVING FROM ONE JOB TO ANOTHER THE
MOMENT OF LOOKING FOR THE NEXT JOB

FLOWS UT OF UNEMPLOYMENET

UMEMPLOYED PEOPLE FINDING JOBS FINALL

THE LAID OFF PEOPLE BEING REHIRED

PEOPLE WHO WERE SEARCHING FOR JOBS FINNALLY STOP SEARCHING

UMEMPLOYMENET STATISTICES ONLY CALCULATE THE JOBLESS WHO RECEIVE BENEFITS

EMPLOYMENT STATICTS IS THE NUMBER OF THE UNEMPLOED WHO WILL RECEIVE BENEFITS

CONSEQUENCES OF UNEMPLOYMENET

THEY ARE INCREASE BURDEN COSTS FROM THE GOVERNMENET

UNFAIR DISTRIBUTION OF INCOME AS THE POOR GET POORER WHEN THE UNEMPLOYMENT RATE IS
INCREASING
LOSS OF HUMAN CAPITAL AS SKILLS GET BETTER WITH WORKINF

INCREASING INEQUALITIES IN DISTRIBUTION OF CAPITAL AS THE POOR GET POORE WHENN

UNEMPLOYEMENT IS RISING

SOCIAL COSTS AS THEY LEAD TO THEFT AND VENDALISM ALSO PERSON SUFFREING

LOSS OF OUTPUT COZ IF SOME POPULATION THEN THE ECONOMY ISNT FULLY UTILIZILING ALL ITS
RESOURCES FOR MAXIMUM OUT PUT

CAUSES OF UNEMPLOYMENET

REAL WAGE UNEMPLOYMENT

CYCLINAL

TECHNICAL

SEOSNAL

STRUCTURAL

FRICTIONAL

REAL WAGE UMEMPLOYEMNET IS WHERE THE DEMAND OF LABOUR EXCEED ITS DEMAND

USULLAY CAUSED BY STRONG TRDADE UNIONSWHEN THE MINIMUM WAGE RATE IS ABOUT MARKET
CLEARING PRICE

FRICTIONAL UNEMPLOYEMNT IS DURING A SEACRH FOR A DREAM JOB AND IT IS ONLY TEMPORARY
THIS ONE

SEONALAL E.G FARMING

TOURIMS