Macro Essay Example | Topics and Well Written Essays - 1500 words

Macro - Essay Example This can be thought of as a result of the rise in price levels. However, because of the price rise, the SRAS curve shifts out to SRAS2. As a result the short-run equilibrium in period 2 is E2, Output falls to Y2 and the price level shoots down to P2. Hereon, the aggregate demand curve remains stationary, and the SRAS gradually climbs along the AD curve back to the initial equilibrium level. The price climbs up back to P0 and the output level converges to its long run level over the long run. Thus, in the long run there are no effects of the positive demand shock since it is temporary. However, there are short-and medium run effects. 2. To answer this question it is important to understand what the role of MPC is in the construction of the IS curve. In the diagram above, we show how an increase in investment affects the goods market equilibrium. Suppose initially the interest rate was fixed at r0 and the investment expenditure was I0. The Effective demand was E0 = C+I0+G. As shown in the above part of the diagram, the effective demand intersects the 45 degree line at output level Y*. Thus, the combination (r0,Y*) ensures equilibrium in the goods market. It is thus a point on the IS curve. Now suppose the interest rate falls to r1. As a result investment rises to I1. So, there is an increase in effective demand as well. Consequentially, Y** is the new equilibrium point. Therefore (r1,Y**) is another equilibrium combination of interest and real income. Joining these we get the IS curve in the lower half of diagram 2. The crucial point to note here is that the slope of the IS curve depends crucially on the slope of the effective demand curve, which is the MPC. Evidently if the Effective demand curve was steeper implying a higher MPC, then the increase in equilibrium income would have been smaller. Thus, we understand that higher the MPC, steeper will be the IS curve. The increase in equilibrium income following an autonomous increase in investment follows a multipl ier mechanism. The value of the multiplier is equal to: . Therefore if the mpc = .75, multiplier is equal to 4 and if mpc = 0.25, the multiplier is equal to 1.33. Therefore, the increase in the income will be equal to 4*60 =$ 240 million in the first case while it will be only $79.8 million in the latter case. The reason for a smaller increase in income when the mpc is smaller lies in the definition of the mpc. It stands for the additional spending on consumption from each additional dollar earned. The higher this value, the higher will be the increase in effective demand following every increase in income. The propagation will be greater, greater the mpc. 3. Obama selling hard on economic stimulus plan AGENCIES,  Jan 25, 2009, 07.49pm IST WASHINGTON: President Barack Obama relentlessly pressed his sales pitch for $825 billion in government spending to halt the US economic slide, dispatching his vice president and top economic adviser for appearances on Sunday television interview programs. Vice President Joe Biden and Larry Summers, the economic chieftain, will be emphasising the message outlined by Obama in his first Saturday radio and Internet address from the White House. The new president touted the benefits of the huge spending program, telling Americans it would produce better schools, lower electricity bills and

Marshalls Assignment Example | Topics and Well Written Essays - 750 words

Marshalls - Assignment Example Indeed, shopping at Marshalls is a hectic and tedious process that consumes a lot of time. As such, finding the right item and in the right size is always a big challenge to the customers (TBF, 2011). This paper therefore proposes that Marshalls adapt a new in-store technology to serve customers faster and more efficiently, handheld devices for employees, use of item-level RFID to better track, and manage its inventory. Consequently, I will consider Macy’s shoes department as an example. To achieve this, I will detail all the benefits of this technology and the approximate cost of installing this technology in Marshalls. Indeed, the Macy's has adopted the recent technology to enhance store shopping. Indeed, the Macy’s technology seeks to expand online inventory and store-to-door fulfillment capabilities. The system is Wi-Fi enabled in brick-and-mortar stores. Additionally, the system uses item-level RFID to better track and manage the inventory. It also collaborates wit h Google to facilitate store maps and mobile-enabled payment. As such, the Macy's can be a very significant technology in perfecting the shopping experience in Marshalls. The device is significantly portable due to its remote control-size. The clerk takes a quick scan of a bar code on the shoe, types in the customer's size and the machine subsequently establishes whether the store has the shoe in stock. This promotes a masterpiece in the shopping experience. This facilitates instant service to the customer without the clerk not physically going to the back room to check the availability of the reference item (Clough, 2012). Indeed, the device can instantly search for the item in the context of type, name, and size without running to the back room. The device therefore speedup service, improves convenience and portability. The device equally sends a message to a subordinate staff in the back room informing him of the customer’s choice and even proposing the closet door for the worker to deliver the item to the customer. More so, the device allows for time saving in serving one customer thus allowing the clerk to serve more customers especially during weekends and holidays. Indeed, the clerk can use the saved time to introduce the first customer to other options thus increasing customer base. The system equally allows the customers to view various products online on the screen as well as allowing them to touch the real items. As such, the device allows the company to display more merchandise that floor space or inventory limits. Moreover, the Google maps partnership allows the customers to navigate the stores and enable tap-and-go mobile payments through the Google Wallet (Giannopoulos, 2012). As such, this device has enormous benefits that can add value to Marshalls Company. This would highly facilitate effective service to the customers in a faster and more convenient manner. It will similarly help Marshalls to better track, and manage its inventory. Mo re so, it will accord service to more customers, enable the workers to work effectively, and generally improve sales turnover in Marshalls. Nevertheless, the installation of such a device at the Marshalls Company is a costly affair. Indeed, in accompany with branches worldwide and resounding numbers of customers, kit would re4quire to have a device for every