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经济学Assignment代写-51due英国代写精选

2017-04-18 | 来源:51due教员组 | 类别:更多范文

这是一份关于经济学Assignment代写,本文主要是:采取立场、评估、分析利弊等几个立场的分析。本经济学Assignment由51due英国论文代写网精选,仅供大家参考:


Take a stance and use economic reasoning to defend it.

1. Evaluate this statement:“Because of recession, General Motors has taken severe financial losses and is having difficulty obtaining credit. If we allow General Motors to go out of business it will not just impact the auto industry; thousands of other businesses will suffer as a result of their collapse. General Motors is just too big for us to allow them to fail, therefore the government must loan GM money to keep them from going out of business.”

I don't agree with “Something is too big and too important in the market for the government to allow it to fail”. Since the economy was declining, of course the market was declining too, because consumers also suffered from income reduction. That is to say, the demand in the market for products, here we refer to vehicles, was shrinking. According to the relation between demand and supply, the supply of vehicles should accordingly be decreased too, otherwise there will be overcapacity. Even though the government makes loans to General Motor, it can‘t finish the whole process of production by getting stuck in the consumption. It can’t turn the loan into sustainable force to make it run continuously, because the market won't just take in what it produces. It will continue to suffer financial loss. So it is in vain to try to save a falling giant. 


2. Evaluate the following statement:“ If we increase the money supply we can lower unemployment.”

This may not work. If we increase money supply, we may stimulate domestic investment to some degree and may create more new jobs. In this sense, increased money supply may lower unemployment. But anyway we should make clear the root course of employment. When the market demand or potential demand for certain products increase, manufacturers increase their output by employing more staff. So the critical point relating to unemployment is the market vitality. If the market lacks consumer demand or consuming desire, increasing money supply will be useless in lowering unemployment.

 

3. What are the pros and cons of active fiscal policy?

By cutting interest rates, carrying out tax relief policies, increasing government spending, fiscal policy increase the money supply and people’s disposable income and fixed investment, thus lowering the unemployment, stimulating domestic demand and social consumption, finally boosting the economy. While at the same time, fiscal policy will impose a heavy financial burden on the government and may increase national debt, therefore leading to financial risks. And fiscal policy may have crowding out effect on the economy, decreasing private consumption and investment, which is bad for sustainable economy development. After all, private consumption and investment are the major and fundamental engine for economy growth.



4. Why are prices important? How does this relate to government price controls and government manipulation of interest rates?

Price mechanism is the most sensitive and the most effective leverage in market resource allocation mechanism. Because prices directly affect the behavior or choices of producers, suppliers and consumers. When the price of a certain product rises, resources will flow to this product, thus achieving the optimal allocation of resources. Since the price mechanism is totally spontaneous, and sometimes can be blind, in order to protect people’s benefit in some certain area, the government may impose price controls. On the other hand, by  price controls, government may affect the market and make adjustments to supply-demand relationship, thus making adjustments to resource allocation to support the development of certain areas while containing the development of others.


5. What are some of the fundamental differences in the way a Classical, or New Classical, economist would view business cycles in comparison to a Keynesian? How would these differences affect policy suggestions related to business cycles?

Classical or New Classical economists attribute business cycles to the reduction of total demand in goods. Based on this, they consider that maintain the balance of overall economic activity is to maintain balance between supply and demand at macro level. While Keynesian economists think that business cycle actually comes from certain reasons outside the operating system, such as the impact of technological progress, rather than the view that market mechanisms are not perfect. The big difference in the reason of business cycle will surely influence the policy tendency on business cycles. Classical economist may come up with policies that can improve market mechanism and stimulate the demand in goods to invigorate the market. And a Keynesian economist may care about some external factors rather than the market mechanism.


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