Net exports, Business Economics

Net exports normally decrease with the effect when aggregate output decline. When a concretionary fiscal policy is implemented net exports will go up . When government maintain the supply of money into the economy then the money will have its value in the economy. Foreigners when they import then they pay a lot of money. On the other hand the domestic expenditure when they export things then they don't have to pay a lot money because of the money value.

Value add tax in uk was considered reasonable to other EU countries when it was 17.5% where other European countries like Denmark or Sweden which pay vat about 25%.

Vat increase had great impact on every one as each of the uk households will pay £1.16 pee day. VAT also has great impact on consumers as well as on the retail sector because a slowdown in this sector can result in decline of the economy growth. But on the other hand the government can have a benefit from the VAT rise to generate extra £11.4 billion for the treasury.VAT has direct impact on the cotton import and textile industry as because the petroleum price will go up and VAT will be paid on each and every item. This is being used for the production of the clothing.

It had affect the customer who spend money on clothing but because of the vat price have gone up on every day goods they won't be able to spend more on the cotton made items so that why the demand for the cotton good will fall. Rise in the vat will lead to the reduction in demand for the clothing causing an upward shift in the demand schedule. Supply is created at p1 leading to pressure on the price d1 and d2 are indication of demand and supply is s1 as shown in the diagram below.

2155_NET EXPORTS.png

Posted Date: 3/2/2013 4:53:45 AM | Location : United States







Related Discussions:- Net exports, Assignment Help, Ask Question on Net exports, Get Answer, Expert's Help, Net exports Discussions

Write discussion on Net exports
Your posts are moderated
Related Questions
There are two agents, A and B. Both have preferences represented by a von Neumann-Morgenstern utility function u(c s j ) = ln (c s j ), where c s j is consumption of agent j in

What is the Washington Consensus? The Washington Consensus is a set of polices arguments advocated through free market economists to motivate growth and it is at the heart of

How is Micro or Microfinance credit assists in financial markets? Micro or Microfinance credit assists: • Grow businesses and raise the income of the poor • Extra income

Marris'' Model OF MAXIMISING POLICY

Growth in Private Capital Flows is explained below: There has been a extraordinary growth in private capital flows since the 1990s. For instance, the value of capital flow tran

Numerical Exercise 11. Suppose that the Fed’s inflation target is 2 percent, potential output growth is 3.5 percent, and velocity is a function of how much the interest rate differ

using a diagram, evaluate the effect of a decrease in money supply to the equilibrium in the goods and money market

MC=25+30Q-9Q^2 fixed cost=55 find total cost avarage cost variable cost

assignments for eco revenww concepts

Why are state approaches occasionally considered as unsuitable for promoting development? Liberal economists’ argument government intervention really thwarts development. G