The Evolution of Rotation Group Bias Sample - Myassignmenthelp.Com

Question: Discuss about The Evolution of Rotation Group Bias Sample. Answer: Private savings of a country implies the difference between gross domestic products (GDP) with tax and consumption (Auerbach et al. 2017). In the given equation, countrys GDP is $ 20 billion, consumption (C) is $13 billion and tax revenue (T) is $ 1 billion. Hence, the value of private savings is: Private savings= GDP - C T Private savings = 20 - ( 13 + 1) Private savings = ( 20 14) Private savings = 6 Thus, the private saving is worth $6 billion. The public savings represent the difference between tax revenue (T) and spending of government (G). In the given equation, the amount of government purchase is worth $ 3 billion. Public Savings = T G Public Savings = ( 1 3) Public Savings = - 2 The negative value of public saving implies budget deficit. From the above equation, it can be stated that the country is facing this phase. The equation of total supply of loanable funds is as follow: Supply of loanable funds = private savings + public savings + foreign savings Hence, supply of loanable funds increases when public savings increase (Fontana and Sawyer 2016). On the other side, a decreasing amount of public savings influences supply of loanable funds to go down. In a closed economy, national savings represent the sum total of private savings and public savings. Hence, in the given equation, the value of nation savings is as follows: National savings = private savings + public savings National savings = 6 + (-2) National savings = 4 Therefore, the value of national saving of this country is $ 4 billion. e) This economy is facing a closed economic condition. Under a closed economy, the country does not perform any servicer related to export and import. Hence, the value of net export of this country is zero. f) In a closed economy, aggregate demand and aggregate supply of the country remains same. This further implies that aggregate savings is always equal with aggregate supply. Here, aggregate supply implies sum total of private savings and public savings ((Auerbach et al. 2017). In other words, aggregate savings and national savings are same concept. Hence, the value of investment is $ 4 billion. a) The size of the labour force within an economy is described by the total amount of employed and unemployed workers (Krueger 2017). An employed person means those who are working for full time and part time. On the other side, unemployed person means those, who are not presently work but seeking for job. Hence, in the given economy, total labour size is: Labour force = employed workers + unemployed workers Labour force = full-time workers + part-time workers + unemployed workers Labour force = 7000 + 2000 +600 Labour force = 9600 b) Labour force participation rate (LFPR) implies the ratio between total numbers of labour force with total adult population (Krueger 2017). Total adult population indicates the difference between total number populations and people under the age group of 15. Hence, in this equation, total number of adult population is (14300 3000) = 11300. This equation can be written as follows: LFPR = (number of people in labour force / total adult population) * 100 LFPR = (9600/ 11300) * 100 LFPR = 84.96% c) Unemployment rate of an economy implies the ratio between number of unemployment and labour force (Krueger, Mas and Niu 2017). Hence, in this given economy, unemployment rate implies; Unemployment rate = (number of unemployed/labour force) * 100 Unemployment rate = (600 / 9600) * 100 Unemployment rate = 6.25% d) Unemployment rate of a country can be obtained from the sum total of natural rate of unemployment and cyclical rate of unemployment (Stepanok 2018). In the given equation, natural rate of unemployment is 5% and unemployment rate is 6.25%. Hence, from the following equation, cyclical rate of unemployment can be measured. Unemployment rate = Natural Rate of Unemployment + Cyclical Rate of Unemployment Cyclical rate of unemployment = Unemployment rate - Natural Rate of Unemployment Cyclical rate of unemployment = 6.25% - 5% Cyclical rate of unemployment = 1.25% Today, the real GDP of both Neverland and Gotham is $20000. Neverland expects their real GDP growth rate for the next 100 years is going to be 2%. Gotham also expects that their real GDP growth rate for the next 100 years is 1.5%. Hence, to estimate real GDP growth rate of each country after 100 years, P (1+r/100) n formula will be used, where r represents GDP growth rate, P represents the real GDP of today and n indicates number of years. Thus, over the next 100 years, Neverlands real GDP per capita will be $20000(1+ 2/100)100 = $20000 (1+0.02)100 = $20000 * 7.24 = $ 144800 Moreover, Gothams real GDP per capita will be: $20000(1+ 1.5/100)100 = $20000 (1+0.015)100 = $20000 * 4.43 = $ 88600 Therefore, after 100 years, real GDP of Neverland will be $144800 and that of Gotham will be $88600. The video shows that the world population is increasing continuously. The number of world population almost becomes double from 1960 to 2008. However, this population growth may become stable after the year 2050. There are various reasons that will further help various countries to prevent their population growth in future. Moreover, the basic concept regarding negative impacts of excessive population on a countrys economy and environment is also wrong (Casey and Galor 2017). In 1950, the number of population of some countries has increased significantly. However, some countries have possessed higher number of population with low life expectancy and they are generally developing countries. Moreover, some other countries have possessed small number of population with high life expectancy and they are called developed countries. However, during 1950-2007, the population structure of developing countries has changed and they have moved towards population structure of developed countries though Africa cannot achieve higher rate of life expectancy due to various diseases (Lea et al. 2018). In this context, the professor of this video has taken example of changing population structure of Swede, Chile and Tanzania. During 1950 to 2007, the population structure of Sweden has grown slightly. However, population structure of Chile has increased towards a higher life expect rate after war. However, Tanzania has faced various health issues like HIV epidemic and so on. Hence, the countrys population growth trend has decreased slowly and the life expectancy rate has reached to a level from where Chile has started its journey. According to the professor, the only way to stop population is decreasing the number of family members or making small family. The government of a country faces budget deficit when its total expenditure exceeds total revenue, which the government collects from tax and non-tax sources. At this situation, the government does not possess extra amount of money after spending expenses (Biza, Kapingura and Tsegaye 2015). This further leads the government to take debt from any national or international money lending sources. Major concern of running government deficit: The government of a country should take major concern regarding the budget deficit and various economic implications can support this view. Firstly, excessive burden of debt leads an economy to an imbalance situation and this further affects entire economic condition and well-being of that particular country, adversely (Silva, Silva and Perera 2018). Secondly, to overcome budget deficit, the government takes loans from domestic banks and other private institutions. This further adversely affects private borrowers from taking loan and investing in production procedure (Lee and Ng 2015). Thus, national income of that country will again go down. Thirdly, this excessive amount of debt will adversely affect future generation of a country by decreasing their income level and increasing their tax rate. Lastly, budget deficit may further cause high rate of economic inflation within country. To overcome this condition, the government can print money to offset the financial imbalance. However, excessive supply of money may further cause inflation within this economy. Economic reason to have a balanced budget: Balanced budget occurs when total government revenue becomes equal with total government spending. Each country wants to achieve a balanced budget so that the country can overcome various economic shortfalls. According to some economists, balanced economic condition helps a country to decrease its interest rate and trade deficit (Huang, Meng and Xue 2017). Moreover, this balanced budget influences the country to increase its aggregate amount of savings and investment. Thus, under this economic situation, a country can achieve its economic development further. Positive impacts of budget deficit and budget surplus: The present business cycle of a country states that whether a budget deficit or surplus becomes acceptable for the economy or not. If the country is facing a contraction phase within the business cycle, then the government may choose to increase its deficit by decreasing tax rate and increasing government expenditure. This decreasing tax rate further influences people to enhance their consumption level and total investment level (Biza, Kapingura and Tsegaye 2015). Moreover, increasing amount of government expenditure further leads the county to produce more output and generate more employment opportunity. On the other side, the government may choose surplus budget when the country is facing expansionary phase within the business cycle. In order to balance the budget of Australia, the government may choose deflationary fiscal policy. By adopting this policy, the government can reduce government expenditure on the one hand and can raise tax rate on another hand (Panjer, de Haan and Jacobs 2017). Thus, increasing amount of tax can further help the economy to overcome its budget deficit. References: Auerbach, A.J., Grinberg, I., Barthold, T.A., Bull, N., Moomau, P.J., Moore, R., Pecoraro, B., Elkins, W.G., Pomerleau, K. and Page, B., 2017. 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The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up?.Review of Economics and Statistics,99(2), pp.258-264. Lea, J., Walker, S.L., Kerley, G.I., Jackson, J., Matevich, S.C. and Shultz, S., 2018. Non?invasive physiological markers demonstrate link between habitat quality, adult sex ratio and poor population growth rate in a vulnerable species, the Cape mountain zebra.Functional Ecology,32(2), pp.300-312. Lee, S.P. and Ng, Y.L., 2015. Public debt and economic growth in Malaysia.Asian Economic and Financial Review,5(1), pp.119-126. Panjer, N., de Haan, L. and Jacobs, J., 2017.Is fiscal policy in the euro area Ricardian?(No. 562). Netherlands Central Bank, Research Department. Silva, N.L.C., Silva, N.K.L. and Perera, P.R.M.R., 2018. Effect of Government Debt on Gross Domestic Production: Evidence from Sri Lanka.Journal for Accounting Researchers and Educators (JARE),1(1). Stepanok, I., 2018. A NorthSouth model of trade with search unemployment.European Economic Review,101, pp.546-566.