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Microeconomics and Monetary Systems

   

Added on  2020-05-16

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Running head: ECONOMICS ASSIGNMENT Economics AssignmentName of the StudentName of the UniversityAuthor Note
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1ECONOMICS ASSIGNMENT Table of ContentsAnswer 1:.........................................................................................................................................2Answer 2:.........................................................................................................................................2Answer 3:.........................................................................................................................................3Answer 4:.........................................................................................................................................4Answer 5:.........................................................................................................................................5References........................................................................................................................................7
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2ECONOMICS ASSIGNMENT Answer 1: Many economists view phenomenon like warfare as stimulator of the national economy.This notion comes from the fact that during warfare, especially in times when the concernedeconomies experience lower phases of business cycle, the government expenditures increaseconsiderably, much of which can be attributed to the war related spending, which benefitsseveral industries and their production and sales levels considerably (Martin-Acena, MartinezRuiz and Pons 2012). This spending, much of which being on military expenses, does nothowever benefit the GDP growth visibly. The increase in the expenditures of the government implies increase in the taxes imposedon common residents, which in turn reduces their purchasing power and economic well beingnegatively. This in turn decreases the aggregate demand of the residents, which hinders theproductivity and profitability of the firms in the private sector as they experience a downturn inthe demand for the commodities and services, which they offer. The expenditures of the government of the United States of America did not have visiblypositive effects in the aspect of stimulating the economy as many of the times these expenseswere funded with the help of deficit financing (Carbonnier 2015). This, though temporarilycreate a positive trend in the GDP as well as in the multipliers, however, this does not haveconsiderable positive impacts on the private sector growth and expenditures. Answer 2: The economy of any country is controlled or driven by the governing authorities with thehelp of robust economic policy framework, which is primarily composed of fiscal and monetary
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