Macroeconomics代写 Question 1:To what extent do you think normative economic analysis, as opposed to positive economic analysis······


Question 1:

To what extent do you think normative economic analysis, as opposed to positive economic analysis, determines our nation’s public policy decisions made by the government? Why? Is that “Good” or “bad”? Why?

Normative economics analysis is based on public opinion and is mainly subjective views rather than economic rationality (Lockwood & Weinzierl, 2016). Although policymakers are guided by the positive economic analysis which deals with direct economic facts, they also depend on the normative economics analysis to make policy decisions. People have divergent opinions about various economic decisions that affect them, and therefore the work of policymaker is to listen to the public through public participation. Therefore, normative economic analysis is an essential and useful component in policy decisions.

For instance, people may differ on how to achieve better and skilled workforce.  Macroeconomics代写

In the normative analysis, a suggestion can be an increase in property taxes to fund education. It becomes an opinion on how to improve the level of education, but it is not verifiable that increase in tax to fund education will result in a better and skilled workforce. Also, the public decision to increase resources to the public schools does not make tax the only source of funding as there are other tax structures. Similarly, the recent decision to build wall bordering Mexico and the U.S. is another form of normative decision based on the opinion that it will control illegal immigrants. Therefore, based on public opinion policy decisions are made. There are other options to control border entry.


Lockwood, B. B., & Weinzierl, M. (2016). Positive and normative judgments implicit in US tax policy, and the costs of unequal growth and recessions. Journal of Monetary Economics, 77, 30-47.

Question 2:  Macroeconomics代写

What are the nation’s major macroeconomic goals? Are they in conflict with each other?

The U.S. aims to achieve full employment, higher standards of living, stability in the global economy, economic growth, and lower inflation (Goodwin, Harris, Nelson, Roach, & Torras, 2015). Each of the above economic goals is discussed below.

Full Employment

U.S. unemployment has continued to fall below 4 per cent. Although it is quite an achievement compared to most nations in the world, the main target is to achieve full employment. The government wants to ensure all adults who make up about 70 per cent of the population are earning minimum wages for decent lives. In this context, full employment embodies the highest amount of skill and unskilled labour that can be absorbed in the economy at any given time. Any remaining unemployment is then considered to be frictional, structural or voluntary.

Higher Standard of Living and Economic Growth  Macroeconomics代写

Notably, the U.S. has been having a remarkable 2 per cent growth in per capita income per year for the last two centuries. In this period, the state of well-being has increased not only to the rich but also to the poor. The standard of living not only consider per capita income but also the lowering in mortality rates and life expectancy. As a result of growth in income, people can access cleaner air and water as well as health care. The government continues to commit itself in the provision of affordable care, minimum wage, stable economy, low unemployment and production which contribute immensely to the GDP.

Stability in Global Economy and Inflation

The U.S. government work to maintain its global competitiveness in the financial market, consumer goods and capital goods. Through fiscal and monetary policies, and international trades, the U.S. economy remains at the lead.

Additionally, there exist conflicts in the bid to achieve one goal against the other. The conflict of full employment vs. low inflation exist as the government does the trade-off between employment and prices. Another significant issue is economic growth versus negative eternities. Sustainable economic growth is the one that does not cause unnecessary harm to nature. The U.S. has been struggling to balance economic growth and the sustainable environment.


Goodwin, N., Harris, J. M., Nelson, J. A., Roach, B., & Torras, M. (2015). Macroeconomics in context. Routledge.

Question 3:  Macroeconomics代写

Under what conditions would a nation be able to produce more of consumer and capital goods currently?

A country can produce more consumer and capital goods at the time of economic growth. That is, when technology advances, skilled labour increases, division and specialization of labour becomes favourable, or a discovery of new raw materials. The productivity in an economy is controlled by the Production Possibility Frontier (PPF) along which the country is can produce efficiently by allocation scarce resource in the best way possible (Mert, 2016).

It means that there are enough car factories producing cars, enough doctors providing healthcare, or enough apple orchards producing apples. Inefficiency occurs if a country cannot produce at the combination indicated at the production possibility frontier. It means that resources are underutilized or mismanaged which could result in dwindling of the economy. Therefore, the PPF shows the limits of efficiency in an ideal economy and how to achieve efficiency through the various combination of goods and services can and should be produced at any given time as shown below.


Along the PPF curve are the most efficient production and utilization of available resources.

For instance, at B the country is producing an equal amount of wine and cotton. It will also be desirable to produce less cotton and more wine at point A by sacrificing some resources for producing cotton, and the opposite is true. The level of production remains unchanged. Point X represents the point of inefficiency, and point Y represents the unattainable level of productivity with the current resource.

However, in as much as the economy can produce below PPF, it can also produce beyond PPF. A point Y the economy will be producing more of consumer and capital goods as shown below.


The primary condition for the shift of PPF outwards is economic growth. For instance, if there is an advancement in technology while other resources remain unchanged, there will be a reduction in the time required to pick and process grapes and cotton, and hence output will increase. The resultant shift of the curve outwards where Y falls becomes the new PPF.


Mert, M. (2016). A Note on the Relationship among the Shape of the Production Possibility Frontier,‘Returns to Scale’ and ‘Returns to Factors’ under Cobb–Douglas Production Function. Studies in Microeconomics, 4(2), 173-184.

Question 4:  Macroeconomics代写

What are the Necessary Ingredients for a nation to Experience Greater Rates of Economic Growth, Higher Average Standard of Living, and a Greater Ability to Compete in the Global Economy? That is, What Could the U.S. do to Achieve All These?

A higher standard of living and competitiveness in the global economy are both attached to a better performing economy. Countries with a higher standard of living like the U.S. have a relatively higher standard of living and global competitiveness. Therefore, it can be concluded that the ingredient for a high rate of economic growth is more or less the same. In this regard, for national prosperity in both the economy, the standard of living, and global competitiveness, it must have the following ingredients.

Greater Rate of Economic Growth

Three factors create economic growth namely more capital, labour and efficient utilization of these resources. Capital and labour are economic inputs and their increase result in higher aggregate economic output. Therefore, in long-term, increase in labor and capital increase the economic output per input and hence increasing the nation’s productivity. However, the increase in employment does not by itself lead to a rise in the standard of living. The economy grows with an increase in investment in labour and capital.

Higher Average Standard of Living  Macroeconomics代写

Better standard of living determined by many factors besides high GDP and increase in per capita income. Among other factors that contribute to a higher standard of living include the availability of employment and better wages, access to affordable goods and services, availability of health care and education as well as affordable housing. Although the standard of living is measured in terms of the entire nation generally, there are small disparities in distribution.

Global Competitiveness

Various factors cause global competitiveness depending on each country and the niche on which it is competing. Thus, no single method of measuring competitiveness generally it can be measured in several ways including:

i. Relative prices of exports

ii. Terms of trade which determine the ratio of exports to imports

iii. Productivity of labour

iv. Cost of labour

Price competitiveness the prices of exports compared to other countries which are affected by relative inflation, real exchange rates, and labour costs. Global competitiveness is also influenced by non-price factors like product quality and designs, research, and development, reliability of the products, political stability, government policies in controlling trade, technologies among other factors. Therefore, a country with high global competitiveness it has effective institutions, infrastructure, good labour market, effective financial market, and sound macroeconomic environment.

Question 5:  Macroeconomics代写

What are Problems Associated with Economic Growth?

Although economic growth is a desirable condition of every nation, it is at times associated with problems which if not addressed may be detrimental to the same economy and standard of living. The challenges of economic growth vary from one country to the other. One of the significant problems of economic growth is the risk of inflation. There are scenarios where the aggregate demand supersedes aggregate supply which result in the overall rise in prices. The rise in prices is as a result of structural inflation.

Economic growth is also synonymous with environmental concerns.  Macroeconomics代写

The economy can be growing from the exploration of natural resources like crude oil. Also, high growth leads to the creation of wealth and investment. These may lead to negative eternities such as noise pollution, air pollution and road congestion besides causing consumption of demerit goods and increase in household and industrial wastes. The use of natural resource can damage or lower the sustainability of the environment. For instance, investment in real-estate may lead to deforestation, overfishing, and loss of natural habitats and biodiversity.

Additionally, economic growth is also associated with income and wealth inequality. The growth in GDP does not always mean evenly distributed resources in society. The countries development may be concentrated in the urban areas at the detriment of rural areas. In such scenarios, a country will have a poor rural population wealthy urban population.

Question 6:  Macroeconomics代写

Is the Price System a “Just” or “Fair” way to Allocate Products? What About Medical Services?

The price system is a necessity when buyers and sellers interact in the market for the exchange of goods and services. Changes in prices reflect the demand and supply in the market and help solve economic problems. Price system allows resources to move where they are more required depending on the demand. Resources are scarce, and hence price reduces their demand and use. In a scenario where all products are priceless, depletion of resources used to produce will be inevitable as the demand exceed and put pressure on resources. In this regard, the prices system is a fair and just way of allocating products in the presence of scarce resources.

Price system follows the theory of demand and supply in the market. 


Consumer and supply depend on prices to decide on whether to enter the market or not. High prices signal to consumers to reduce consumption of a particular product or withdraw from buying it and signal to the suppliers to supply more or enter into the market (Kwat, n.d). Similarly, when demand increases prices increases and vice versa and when the prices increase supply increases and vice versa. Therefore, using the price system, the market for products become self-regulating.

However, in health care services, the price system should not be allowed into play. Health care is always on high demand, and hence if market forces are allowed to determine the prices, health care will not be affordable to the majority of the population. Therefore, the government keep watch of the health care system by making it government-owned services. Health care services are government owned with few options for private facilities and are mostly subsidized or free for certain conditions.


Kwat, N. (n.d). Price system of an economy. Retrieved from

Question 7:  Macroeconomics代写

Why are the Price of Most Computers and Electronic Products Been Falling Over the Past Several Years While the Demand for These Products Has Been Rising at the Same Time?

It is conventional that the demand increases with a decrease in prices and vice versa whereas supply lowers with a decrease in prices. When demand is high, suppliers increase prices to maintain market equilibrium. However, that is not the case with the prices and demand of most computers and electronic devices. The reason, the supply, and demand for electronic devices do not mostly affect by the prices but by other factors including population, tastes, and preferences, increase in income, and more.

The market for computers and other electronic devices is growing at an exponentially higher level. Similarly, as the demand increase, supply is increasing and more manufacturers enter the market. It leads the suppliers to alter the quality of electronic devices to sell at lower prices to make them affordable and competitive in the market. Suppliers cannot increase prices with demand because buyers have many options for suppliers. Therefore, the quality and large market of electronic devices have become the primary determinant of prices in the market.

Question 8:  Macroeconomics代写

Why Does the Government Get Involved in Setting Prices – Price Controls?

The primary objective of government involvement in price setting and controls is to address issues of inefficiency (Bond & Goldstein, 2015). Optimal market functions efficiently, and resources are ideally allocated equally. However, in an inefficient market, the resources will be unfairly distributed with some having too much while others have not enough or nothing. Therefore, the government aims to regulate these market inefficiencies through price regulations, taxations, and subsidies.

The first reason for price control is to maximize social welfare.  Macroeconomics代写

The unregulated market is full of cartels and organizations wield monopolistic power to exploit consumers by raising the prices of products. Setting a price ceiling is one way of preventing cartel and rogue organizations from exploiting the public. The government tries to make sure that certain products and services are affordable to the public by establishing a minimum price. For instance, establishing a minimum price for rent ensure that tent prices do not go beyond market demand which might force some people out of the specific area.

However, in setting a minimum price, the government sought to discourage consumption of certain good and services particularly demerit goods like alcohol. Besides, the government also target to protect local industries from cheap products from export markets. Therefore, price control is the primary way the government participates in the market.


Bond, P., & Goldstein, I. (2015). Government intervention and information aggregation by prices. The Journal of Finance, 70(6), 2777-2812.

Question 9:  Macroeconomics代写

How does the Government Attempt to Correct for an Inequitable Distribution of Income?

The government has the responsibility of ensuring equal distribution of income from high earners to low earners through the mix of strategies. In any society, the most likely affected by inequality are unemployed, underemployed, disable and terminally ill, low skilled, elderly, and casual workers (Saez & Zucman, 2016). The government uses taxation system, and welfare benefits to redistribute wealth and resources to offer remedy for income inequalities.

In the context of taxation, the government utilizes two taxation systems namely progressive and regressive. Tax system intervenes in the labour market by altering the disposable income and benefits. Progressive tax system takes progressively and proportionately more income from high earners less than that of the low earner. If this taxation is accompanied by the payment of welfares low-income earners, the gap between the high and low-income earners is relatively reduced.

On the other hand, regressive taxes are paid as a percentage of the income.  Macroeconomics代写

The percentage falls with increase in income. Thus, the burden of taxation is mainly on low-income earners. The tax system seeks to get more from the poor and distribute it to the rich and even though the approach is not the ideal way of income and wealth redistribution and not widely used, it one way of encouraging productivity in a country.

Moreover, the government can redistribute wealth and income through welfare benefits. It is assumed that not everybody in society has the opportunity or ability to sell their labour. Therefore, the government uses the welfare system to provide basic personal income in forms of unemployment benefits, income support, housing benefits, pension system, child benefits, sick benefits, disability benefits, and more. These benefits ensure that the beneficiaries can be able to sustain themselves like the income earners and hence help reduce the gap income and wealth.


Saez, E., & Zucman, G. (2016). Wealth inequality in the United States since 1913: Evidence from capitalized income tax data. The Quarterly Journal of Economics, 131(2), 519-578.

Question 10:  Macroeconomics代写

What can Cause an Increase in Aggregate Demand and Therefore in Real GDP and Price Levels?

Aggregate demand is the total amount of goods demanded in an economy at a particular time and price (Challe, Matheron, Ragot, & Rubio‐Ramirez, 2017). It is a representation of all goods and services that are consumed at all prices assuming there was no shortage and hence equivalent to the country’s GDP. Aggregate demand is equal to the consumption of goods and services (C), amount of investment (I), government spending (G), and the net export (X-M). The general formula is

AD = C + I + G + (X – M)

The change in aggregate demand is observed using aggregate supply-aggregate demand model.  Macroeconomics代写

The model uses the theory of demand and supply to establish economic equilibrium. Increase in either consumption, investment, government spending or net export shifts the aggregate demand curve to the right as shown below.



The slope of the AD curve shows the change in the spending and establishment of a new market equilibrium relative to the aggregate supply curve. The shift to the right of the AD is caused by monetary expansion. If the stock of money is increased, there will be an increase in real money stock at all prices. At the same time, interest rates lower and hence people will hold higher balances. Therefore, the AD demand is simulated which rise equilibrium levels of income and spending.


Challe, E., Matheron, J., Ragot, X., & Rubio‐Ramirez, J. F. (2017). Precautionary saving and aggregate demand. Quantitative Economics, 8(2), 435-478.


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