上海财大ACCAF1讲义3参考资料

Chapter3Themacro-economicenvironment1第1页1ThestructureandobjectivesoftheeconomyMacro-economicsisthestudyoftheaggregatedeffectsofthedecisionsofindividualeconomicunits(suchashouseholdsorbusinesses).Itlooksatacompletenational

economy,ortheinternational

economicsystemasawhole.2第2页1.1IncomeandexpenditureflowsThereisa‘circularflowofincomeintheeconomy’Thismeansexpenditure,outputandincomewillallhavethesametotalvalueAbasicclosedeconomy:FirmsHouseholds3第3页1.2WithdrawalsandinjectionsintothecircularflowofincomeWithdrawals:savings,taxation,importexpenditureInjections:investment,governmentspending,exportincomeFinancialsector:saving,investmentspendingGovernment

sector:taxation,governmentspendingForeign

sector:importdemand,exportdemandChangesinbehaviourofoneofthecomponentsofthecircularflowcanleadtosignificantchangesineconomicperformanceasawhole.4第4页2FactorswhichaffecttheeconomyTheeconomyisrarelyinastablestatebecauseofthevariouschangingfactorswhichinfluenceit.Theseincludeinvestmentlevels,themultipliereffect,inflation,savings,confidence,interestratesandexchangerates.5第5页2.1ThemultiplierinthenationaleconomyThemultiplierinvolvestheprocessofcirculationofincomeinthenationaleconomy,wherebyaninjectionofacertainsize

leadstoamuchlargerincreaseinnationalincome.Aninitialincreaseinexpenditurewillhaveasnowballeffect,leadingtofurtherandfurtherexpendituresintheeconomy.6第6页Theincreaseinnationalincomewillbeamultiplieroftheinitialincreaseinspending,withthesizeofthemultiple

dependingonfactorssuchaswhatproportionofanynewinvestmentisspentorwhatproportionissaved.7第7页2.2Aggregatesupplyanddemand2.2.1AggregatedemandThetotaldemandintheeconomyforgoodsandservicesiscalledaggregatedemand.Include:consumption,investment,governmentspendingandexportsminusimports.8第8页TheaggregatedemandcurveTheaggregatedemandcurveslopesfromlefttoright.Ashiftmaybeduetoafactorsuchasanincreaseordecreaseinconsumerconfidence.9第9页2.2.2AggregatesupplyTheaggregatesupplyreferstotheabilityoftheeconomytoproducegoodsandservices.TheaggregatesupplecurveTheaggregatesupplycurveslopesupwardsfromlefttorightanddoesnotshiftintheshortterm10第10页Wheretheaggregatedemandcurveintersectswiththeaggregatesupplycurve,thetotaldemandforgoodsandservicesintheeconomyisequaltothetotalsupplyofgoodsandservicesintheeconomy.Thisisknownastheequilibriumlevelofnationalincome.Achangeineithertheaggregatesupplyordemandwillhaveanaffectonthepricelevelandthenationalincome.11第11页2.2.3AshiftinaggregatedemandP59DiagramAdropinconsumerconfidence:Y0Y1,P0P1Ariseinconsumerconfidence:Y0Y2,P0P212第12页3

Thedeterminationofnationalincome3.1AggregatedemandandsupplyequilibriumDemandforgoodsandservicesisinbalancewiththeavailablesupply13第13页3.2Full-employmentnationalincomeIfoneaimofacountry’seconomicpolicyisfullemployment,thentheidealequilibriumlevelofnationalincomewillbewhereADandASareinbalanceatthefullemploymentlevelofnationalincome,withoutanyinflationarygap.Whereaggregatedemandatcurrentpricelevelsisexactlysufficienttoencouragefirmstoproduceatanoutputcapacitywherethecountry’sresourcesarefullyemployed.14第14页3.3InflationarygapsOccurswhenresourcesarefullyemployedAnyincreaseindemandonlyservestoincreaseprices3.4Example15第15页3.5DeflationarygapOccurswithunemploymentofresourcesAnychangeindemandwillaffectoutputPricesarefairlyconstantActualnationalincomeisbelowfullemploymentnationalincome16第16页3.6StagflationHighunemploymentcombinedwithhighinflationAnylongtermmajorincreaseincosts(apriceshock)islikelytohavethiseffect.17第17页3.7SummaryAnequilibriumnationalincomewillbereachedwhereaggregatedemandequalsaggregatesupply.Oneisatalevelofdemandwhichexceedstheproductivecapabilitiesoftheeconomyatfullemployment,andthereisinsufficientoutputcapacityintheeconomytomeetdemandatcurrentprices.Thereisthenaninflationarygap.Theotherisatalevelofemploymentwhichisbelowthefullemploymentlevelofnationalincome.Thedifferencebetweenactualnationalincomeandfullemploymentnationalincomeiscalledadeflationarygap.Tocreatefullemployment,thetotalnationalincomemustbeincreasedbytheamountofthedeflationarygap.18第18页4

ThebusinesscycleBusinesscyclesortradecyclesarethecontinualsequence.rapidgrowthinnationalincome,followedby……aslow-downingrowth……thenafallinnationalincome...…afterwhichcomesgrowthagain,whichpeaks……followedagainbyrecession…19第19页4.1PhasesinthebusinesscycleP61DiagramRecession(PointA)Depression(PointB)Recovery(PointC)Boom(PointD)Recessiontendstooccurquickly,whilerecoveryistypicallyaslowerprocess.20第20页4.2DiagrammaticexplanationP61DiagramWidefluctuationsinlevelsofeconomicactivityaredamagingtotheoveralleconomic,well-beingofsociety.Governmentsgenerallyseektostabilisetheeconomicsystem.21第21页QuestionsInthebusinesscycleifArepresentsRecession,BDepression,CRecoveryandDBoom,whichisthecorrectsequence?ABADCBDABCCCBADDACDBAnswer:B22第22页5

Inflationanditsconsequences5.1InflationInflationisthenamegiventoanincreaseinpricelevelsgenerally.Itisalsomanifestinthedeclineinthepurchasingpowerofmoney.Deflation(fallingprices)isnormallyassociatedwithlowratesofgrowthandevenrecession.Ahealthyeconomymayrequiresomeinflation.23第23页5.2Whyisinflationaproblem?(ahighrateofpriceinflation)5.2.1RedistributionofincomeandwealthInwayswhichmaybeundesirable.Ingeneral,intimesofinflationthosewitheconomicpowertendtogainattheexpenseoftheweak,particularlythoseonfixedincomes.24第24页5.2.2BalanceofpaymentseffectsIfacountryhasahigherrateofinflationthanitsmajortradingpartners,itsexportswillbecomerelativelyexpensiveandimportsrelativelycheap.Asaresult,thebalanceoftradewillsuffer,affectingemploymentinexportingindustriesandinindustriesproducingimport-substitutes.Eventually,theexchangeratewillbeaffected.25第25页5.2.3UncertaintyofthevalueofmoneyandpricesNoonehascertainknowledgeofthetruerateofinflation.Asaresult,noonehascertainknowledgeofthevalueofmoneyoroftherealmeaningofprices.Aspricesconveylessinformation,theprocessofresourceallocationislessefficientandrationaldecision-makingisalmostimpossible.26第26页5.2.4ResourcecostsofchangingpricesSubstantiallabourtimeisspentonplanningandimplementingpricechanges.Customersmayalsohavetospendmoretimemakingpricecomparison.27第27页5.2.5EconomicgrowthandinvestmentInflationisharmfultoacountry’seconomicgrowthandlevelofinvestment.28第28页5.3ConsumerpriceindicesAconsumerpriceindexisbasedonachosen‘basket’ofitemswhichconsumerspurchase.Aweightingisdecidedforeachitemaccordingtotheaveragespendingontheitembyconsumers.29第29页5.3.1TheRPIandtheCPIRetailPricesIndex(RPI)measuresthepercentagechangesmonthbymonthintheaveragelevelofpricesofthecommoditiesandservices,includinghousingcost,purchasedbythegreatmajorityofhouseholdsintheUK.UKHICP(HarmonisedIndexofConsumerPrices)iscalledtheConsumerPricesIndex(CPI).TheCPIexcludesmosthousingcosts.30第30页5.3.2TheunderlyingrateofinflationUnderlyingrateofinflationisusuallyusedtorefertotheRPIadjustedtoexcludemortgagecostsandsometimesotherelementsaswell(suchasthelocalcounciltax).RPIXistheunderlyingrateofinflationmeasuredastheincreaseintheRPIexcludingmortgageinterestpayment.RPIYgoesfurtherandexcludestheeffectsofsalestax(VAT)changesaswell.31第31页5.4Causesofinflation5.4.1DemandpullinflationInflationresultingfromapersistentexcessofaggregatedemandoveraggregatesupply.5.4.2CostpushinflationInflationresultingfromanincreaseinthecostsofproductionofgoodsandservices.5.4.3ImportcostfactorsWhenthecostsofessentialimportsariseregardlessofwhetherornottheyareinshortsupply.32第32页5.4.4ExpectationsandinflationRegardlesswhetherthefactorsthathavecausedinflationarestillpersistentornot,therewillariseagenerallyheldviewofwhatinflationislikelytobe.Wage-pricespiral5.4.5MoneysupplygrowthMonetaristshavearguedthatinflationiscausedbyincreasesinthesupplyofmoney.33第33页QuestionsTheConsumerPricesIndex(CPI)istheEuropeanequivalentoftheRetailPricesIndex(RPI).Trueorfalse?ATrueBFalseAnswer:B34第34页6

Unemployment6.1TherateofunemploymentNumberofunemployed/totalworkforce*100%FlowsintounemploymentMembersoftheworkinglabourforcebecomingunemployedPeopleoutofthelabourforcejoiningtheunemployedFlowsoutofunemploymentUnemployedpeoplefindjobsLaid-offworkersbeingre-employedUnemployedpeoplestoppingthesearchforwork35第35页6.2ConsequencesofunemploymentLossofoutput:theeconomyisnotproducingasmuchoutputasitcouldLossofhumancapital:theunemployedlabourwillgraduallylossitsskillsIncreasinginequalitiesinthedistributionofincome:thepoorgetpoorerSocialcosts:personalsufferinganddistress,increasesincrimeIncreasedburdenofwelfarepayment36第36页6.3CausesofunemploymentRealwageunemploymentWhenthesupplyoflabourexceedsthedemandforlabour,butrealwagesdonotfallforthelabourmarkettoclear.StrongtradeunionsMinimumwagerateFrictionalFrictioninthelabourmarket:difficultyinmatchingquicklyworkerswithjobsTemporary37第37页SeasonalIncertainindustries,thedemandforlabourfluctuatesinseasonalpatternsthroughouttheyearShort-termStructuralLong-termchangesoccurintheconditionsofanindustryHighregionalunemploymentinthelocationoftheindustryaffectedLonger-term38第38页TechnologicalStructuralunemployment,whichoccurswhennewtechnologiesareintroducedOldskillsarenolongerrequiredAlaboursavingaspectCyclicalordemand-deficientDomesticandforeigntradegothroughcyclesofboom,decline,recession,recovery,thenboomagain,andsoonCanbelong-term39第39页6.4GovernmentemploymentpoliciesSpendingmoremoneydirectlyonjobs(forexamplehiringmorecivilservants)EncouraginggrowthintheprivatesectoroftheeconomyEncouragingtraininginjobskillsOfferinggrantassistancetoemployersinkeyregionalareas40第40页Encouraginglabourmobilitybyofferingindividualsfinancialassistancewithrelocationexpense,andimprovingtheflowofinformationonvacanciesReducingwagestomarketclearinglevelsAbolishingclosedshopagreementsAbolishingminimumwageregulations41第41页QuestionsWhichofthefollowingisnotacategoryofunemployment?ATechnologicalBCyclicalCDemographicDSeasonalAnswer:C42第42页Howis‘structuralunemployment’caused?ALong-termchangesoccurintheconditionsofanindustryBStrongtradeunionsresistafallintheirwagesCThedemandforlabourfluctuatesthroughouttheyearDThereisdifficultyinmatchingworkerswithjobsAnswer:A43第43页Whydoesunemploymentresultinlossofoutput?AUnemployedpeopleearnlessthanemployedpeopleBUnemployedlabourwillgraduallyloseitsskills,andabilitytocontributetoproductionlevelsCUnemployedbringssocialproblemsDTheeconomyisnotproducingasmuchasitcould,becausethepotentiallabourforceisnotfullyutilisedAnswer:D44第44页7

Theobjectivesofeconomicgrowth7.1EconomicgrowthEconomicgrowthmaybemeasuredbyincreasesintherealgrossnationalproduct(GNP)perheadofthepopulation.EconomicgrowthmaybebalancedwhenallsectorsoftheeconomyexpandtogetherUnbalancedActualeconomicgrowthistheannualpercentageincreaseinnationaloutput,whichtypicallyfluctuatesinaccordancewiththetradecycle.Potentialeconomicgrowthistherateatwhichtheeconomywouldgrowifallresources(egpeopleandmachinery)wereutilised.45第45页7.2ActualgrowthActualgrowthinthelongrunisdeterminedbytwofactorsThegrowthinpotentialoutput(aggregatesupply)Thegrowthinaggregatedemand(AD)7.3PotentialgrowthThecausesofgrowthinpotentialoutputarethedeterminantsofthecapacityoftheeconomy(thesupplyside)ratherthanactualspending(thedemandside)TheremaybeincreasesintheamountofresourcesavailableLandandrawmaterialsLabour(thesizeoftheworkingpopulation)CapitalIncreasesintheproductivityofresources46第46页7.4FactorsneededforsustainedeconomicgrowthSustainedeconomicgrowthdependsheavilyonanadequatelevelofnewinvestment,whichwillbeundertakenifthereareexpectationsoffuturegrowthindemand.7.5NaturalresourcesImposealimitontherateofgrowth47第47页7.6TechnologicalprogressThesameamountsofthefactorsofproductioncanproduceahigheroutputNewproductswillbedeveloped,thuseaddingtooutputgrowthCapitalsaving/Neutral/LaboursavingTechnologicalprogressmaythereforestimulategrowthbutatthesametimeconflictwiththegoaloffullemployment.48第48页7.7ExternaltradeinfluencesoneconomicgrowthIftradingpartnershaveslowgrowth,theamountofexportsacountrycanselltothemwillgrowonlyslowly,andthislimitsthecountry’sownopportunitiesforinvestmentandgrowth.49第49页7.8AdvantagesanddisadvantagesofeconomicgrowthAdvantagesEconomicgrowthshouldleadtoahigherincomeperheadwhichcaninturnleadtohigherlevelsofconsumptionandabetterstandardofliving.Acountrywitheconomicgrowthismoreeasilyabletoprovidewelfareserviceswithoutcreatingintolerabletaxburdensonthecommunity.DisadvantagesFasteruseofnaturalresourcesPollutionPeopleunabletoadapttothedemandsfornewskillsandmoretraining,structuralunemploymentIntheshort-run,highergrowthrequiresacutinconsumption50第50页QuestionsWhichofthefollowingisnotadisadvantageofeconomicgrowth?AIncreasedpollutionBStructuralunemploymentCFasteruseofnaturalresourcesDHigherstandardoflivingAnswer:D51第51页8

GovernmentpoliciesformanagingtheeconomyFourmainobjectivesofeconomicpolicyToachieveeconomicgrowthTocontrolpriceinflationToachievefullemploymentToachieveabalancebetweenexportsandimports8.1GovernmentspendingGovernmentspendmoneyonsuchashealth,socialservices,education,transport,defence,grantstoindustryandsoon.52第52页8.2SignificanceofgovernmenttaxandspendingdecisionstocompaniesExpendituredecisionsbygovernmentaffectsupplierstothegovernmentAknock-oneffectthroughouttheeconomyTaxationaffectsconsumers’purchasingpowerTaxesoncompanyprofitsandtaxallowancesaffecttheafter-taxreturnoninvestmentInvestmentbythepublicsectorwilltendtodirectedtowardsactivitiesinwhichthepublicsectorisinvolvedoronfulfillingsocialnees.Publicsectorinvestmentmighthavealongertimescaleorlessquantifiableeconomicbenefitsthantheprivatesectorisabletocopewith53第53页8.3EconomicplanningGovernmentplanseconomicactivityindetail:thedirectorofeconomicactivity,outoffavourGovernmentplanningonalesserscale,withthegovernmentasanenablerofprivatesectoractivityandascorrectorofmarketimperfectionsGovernment’smostimportanteconomicroleisthelegalsystemrelatingtobusinessGovernmentalsohasaresponsibilityformacro-economicmanagement,toprovidestableconditionsGovernmentscanraisetradebarrierstoprotectdomesticindustryGovernmentscansubsidiseexports,orpromotetheminotherwaysGovernmentscanalsoencourageinwardinvestmentbyforeigncountriesRegionalpolicyTaxincentivesorgrantsfroinvestingincertainareasRelaxingorenforcingtownandcountyplanningrestrictionsDevelopingnewtownstoreducepopulationpressureinmajorconurbationsPromotionofinfrastructuredevelopments54第54页8.4StateinfluencesoverorganisationsOveralleconomicpolicyIndustrypolicyEnvironmentandinfrastructurepolicySocialpolicyForeignpolicy55第55页8.5GovernmentinfluenceovercommercialdecisionsOutputcapacityCompetitionMonopoliesSalesdemand8.6GovernmentinfluenceoveroperationaldecisionsHealthandsafetyEmploymentConsumersTax56第56页QuestionsWhichofthefollowingisNOTatargetofmacroeconomicpolicyobjectives?AEconomicgrowthBWagesandsalariesCInflationDUnemploymentAnswer:B57第57页9

FiscalpolicyGovernmentpolicyontaxation,publicborrowingandpublicspending9.1FiscalpolicyandtheBudgetTheformalplanningoffiscalpolicyisusuallydoneonceayearandissetoutintheBudgetExpenditureRevenuesBorrowingTheamountthatthegovernmentmustborroweachyearisknownasthePublicSectorNetCashRequirement(PSNCR)58第58页9.2BudgetsurplusandbudgetdeficitHowthegovernmenttostimulatedemandintheeconomyItcanincreasedemanddirectlybyspendingmoreitselfThisextraspendingcouldbefinancedbyhighertaxesTheextragovernmentspendingcouldalsobefinancedbyextragovernmentborrowingItcanincreasedemandindirectlybyreducingtaxationCutsintaxationcanbematchedbycutsingovernmentspendingTaxcutscanbefinancedbymoregovernmentborrowingExpenditurechangesandtaxchangesarenotmutuallyexclusiveoptions59第59页Whenagovernment’sincomeexceedsitsexpenditure,andthereisanegativePSNCRorpublicsectordebtrepayment(PSDR),runningabudgetsurplusContractionarypolicy,toreducethesizeofthemoneysupplybytakingmoneyoutoftheeconomyWhenagovernment’sexpenditureexceedsitsincome,sothatitmustborrowtomakeupthedifference,thereisaPSNCR,runningabudgetdeficitinjectingmoneyintotheeconomy,expansionarypolicy60第60页9.3FunctionsoftaxationToraiserevenuesforthegovernmentTocausecertainproductstobepricedtotakeintoaccounttheirsocialcostsToredistributeincomeandwealthToprotectindustriesfromforeigncompetition61第61页9.4DirectandindirecttaxesAdirecttaxispaiddirectbyapersontotheRevenueauthority.Adirecttaxcanbeleviedonincomeandprofits,oronwealth.Directtaxestendtobeprogressiveorproportionaltaxes.Theyarealsousuallyunavoidable.62第62页AnindirecttaxiscollectedbytheRevenueauthorityfromanintermediary(asupplier)whothenattemptstopassonthetaxtoconsumersinthepriceofgoodstheysellAspecifictaxischargedasafixedsumperunitsoldAnadvaloremtaxischargedasafixedpercentageofthepriceofthegoodCanberegressive,whenthetaxesareplacedonessentialcommoditiesorcommoditiesconsumedbypoorerpeopleingreaterquantities.63第63页9.5TaxandincomelevelsAregressivetaxtakesahigherproportionofapoorperson’ssalarythanofarichperson’s.Aproportionaltaxtakesthesameproportionofincomeintaxfromalllevelsofincome.Aprogressivetaxtakesahigherproportionofincomeintaxasincomerises.64第64页Questions________iscollectedbytheRevenueauthorityfromanintermediarywhothenattemptstopassitontoconsumers.Whichofthefollowingcorrectlycompletesthesentenceabove?ADirecttaxBProgressivetaxCIndirecttaxAnswer:C65第65页10

Monetarypolicy10.1ObjectivesofmonetarypolicyUsesmoneysupply,interestrates,exchangerates,creditcontrolsInfluencesaggregatedemandandcontrolsinflation……whichreduceseconomicuncertainty,stimulatesinvestmentandoutput66第66页10.2ThemoneysupplyasatargetofmonetarypolicyTomonetaristeconomists,anincreaseinthemoneysupplywillraisepricesandincomesandthisinturnwillraisethedemandformoneytospend.67第67页10.3InterestratesasatargetofmonetarypolicyAriseininterestrateswillraisethepriceofborrowing,investmentplansmaybecurtailed,individualsshouldbeexpectedtoreduceorpostponeconsumptionTheconnectionisnotastableandpredictableone,andinterestratechangesareonlylikelytoaffectthelevelofexpenditureafteraconsiderabletimelag.68第68页Highinterestrateswillkeepthevalueofsterlinghigherthanitwouldotherwisebe,thiswillkeepthecostofexportshigh,andsodiscouragethepurchaseofexports.Toprotectthebalanceofpaymentsandtopreventimport-costpushinflation.Highinterestrateswillattractforeigninvestorsintosterlinginvestments,andsoprovidecapitalinflowswhichhelptofinancethelargeUKbalanceofpaymentdeficit.Theauthoritiesareabletoinfluenceinterestratesmuchmoreeffectivelyandrapidlythantheycaninfluenceotherpolicytargets.69第69页10.4TheexchangerateasatargetofmonetarypolicyIftheexchangeratefalls,exportsbecomecheapertooverseasbuyersandsomorecompetitivetoexportmarket.Importswillbecomemoreexpensive,soreducedemandforimports.Tendtoincreasethecostofimportsandaddstotherateofdomesticinflation.Anincreaseintheexchangeratewillhavetheoppositeeffect.70第70页10.5TargetsandindicatorsAleadingindicatorisonewhichgivesanadvanceindicationofwhatwillhappentotheeconomyinthefuture.EgvalueofsterlingAcoincidentindicatorisonewhichgivesanindicationofchangesineconomicconditionsatthesametimethatthesechangesareoccurring.EgnarrowmoneysupplyAlaggingindicatorisonewhichlagsbehindtheeconomiccycle.EgunemploymentMonetaryindicatorsThesizeofthemoneystockInterestratesExchangerateThesizeofthegovernment’sborrowingGovernmentborrowingasapercentageofGrossDomesticProduct71第71页10.6MonetarypolicyandfiscalpolicyMonetarypolicycanbemadetoactasasubsidiarysupporttofiscalpolicyanddemandmanagement.Apolicyoflowinterestratesortheabsenceofanyformofcreditcontrol,wouldincreaseexpenditureintheeconomy.Highinterestratesmightreducespendingintheeconomy.Strictcreditcontrolsmightreducelendingandsoreducedemandintheeconomy.72第72页10.7Monetarypolicy,inflationcontrolandeconomicgrowthHighinflationincreaseseconomicuncertainty.Bringinginflationundercontrolwillrestorebusinessconfidenceandhelpinternationaltradebystabilisingtheexchangerate.Aresurgenceofbusinessconfidencethroughlowerinterestrateswillstimulateinvestmentandrealoutput.Acontrolledgrowthinthemoneysupplywillprovidehigherincomesforindividua