ECON6000 Economic Principles & Decision Making

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Author Note

ECONOMICS ASSIGNMENT1
Executive Summary
For this paper, the factors that will impact the overall demand of Schmeckt Gut will
be thoroughly analyzed and evaluated. The main factors which will be analyzed include
among others; tariff rate growth, income growth and inflation rate growth. Inflation has
various consequences to overall economic performance of firms, households and
Government. Inflation exists in various forms depending on the causes. Also tariffs and
income are important in facilitating the aggregate demand and supply levels in an economy.
Therefore to effectively measure the impact of the independent variables on the dependent
variable, a regression analysis will be undertaken to determine the existing relationships.
Lastly, the paper will draw rational and logical recommendations that can be adopted by the
company to promote its variability and sustainability.

ECONOMICS ASSIGNMENT2
Table of Contents
Introduction................................................................................................................................3
Demand and Supply...................................................................................................................3
Demand and Supply and supply curve.......................................................................................4
The aggregate supply/aggregate demand...................................................................................4
Aggregate supply shocks............................................................................................................6
Aggregate supply shocks curve..................................................................................................6
The Phillips curve......................................................................................................................7
The Laffercurve..........................................................................................................................7
SECTION 2................................................................................................................................8
Impacts of Tariff rate growth, Inflation and Yon Schmeckt Gut demand.................................8
Part B........................................................................................................................................10
Regression Analysis.................................................................................................................10
Recommendations....................................................................................................................13
References................................................................................................................................14
Appendix.................................................................................................15

ECONOMICS ASSIGNMENT3
Introduction
It is important for Schmeck Gut to put into consideration a number of factors such as
import tariffs, inflation and income growth. The above factors will be vital in enabling the
organization attain a relatively larger market share, increase her levels of sales and
profitability thus be able to succeed in a complex business environment. The company as per
the available data will be operating in a monopolist market structure meaning that a strong
awareness of such factors will be very important for its growth and development (Afonso &
Kazemi, 2017). Schemeck needs to put into considerations the impacts of the various
projections and how the impact one another (Parenti e tal.,2017). In simple terms a tariff
refers to a tax levied on imported goods. Tariffs are levied for purposes of attaining specific
objectives such as infant industry growth, consumer protection and others. Inflation is defined
as the persistent increase in the prices of goods and services (Akimaya & Dahl, 2018).
Inflation affects the overall purchasing powers of a country currency due to the poor
exchange rate (Parenti e tal.,2017). Increase income is defined as the improvement in the
consumer’s disposable income (Parenti e tal.,2017). High incomes mean high levels of
purchasing powers depending on whether it is a normal, inferior or giffen good (Blinder,
2008). Therefore it can generally be asserted that the movement of Laffer curve, Phillip’s
curve, demand, supply, aggregate and supply curves base on the levels of tariffs, income
growth and inflation growth (Parenti e tal.,2017). Thus a percentage increase in the level of
income leads to arise in demand when there is no increase in tariffs and inflation. Also arise
in the level of income depending on whether it is large or small results into increase in tariffs.
Also an increase in inflation affects the overall levels of income and tariffs (Bolshaw, 2012).
Supply and Demand