Lecture Business economics - Lecture 26: The Influence of Monetary and Fiscal

In this chapter you will learn the theory of liquidity preference as a short-run theory of the interest rate, analyze how monetary policy affects interest rates and aggregate demand, analyze how fiscal policy affects interest rates and aggregate demand, discuss the debate over whether policymakers should try to stabilize the economy.

ffer? Poverty estimates are highly sensitive to a variety of factors The very basis of drawing the poverty line may differ across researchers  Calorie intake approach vs basic needs approach  Within calorie intake basis some my use 2250 calories; 2550 calories; or 2350 calories per adult equivalence  CPI vs SPI vs WPI vs prices (or unit values) as derived from the survey to adjust poverty line  Consumption vs income  Same poverty line for rural and urban areas vs different poverty lines for the two  Basket of commodities may differ Summary • At the macro level, economic growth implies greater availability of public resources to improve the quantity and quality of education, health and other services • At the micro level, economic growth creates employment opportunities, increases the income of the people and therefore, reduces poverty • Poverty is generally defined as lack of command over resources to satisfy basic needs, mainly food, shelter and clothing This approach is basically an income approach as it measures the degree of lowness of income or consumption in the society Summary • A relative poverty line is set at around 50% of the average per capita income of the country • The subjective poverty line refers to that level of income at which people feels that their income is just equal to the minimum income required to meet end need • The absolute poverty line is defined as a minimum socially acceptable level of income or consumption used to distinguish the poor from non-poor ... it measures the degree of lowness of income or consumption in the society Summary • A relative poverty line is set at around 50% of the average per capita income of the country • The subjective... opportunities, increases the income of the people and therefore, reduces poverty • Poverty is generally defined as lack of command over resources to satisfy basic needs, mainly food, shelter and clothing...Summary • At the macro level, economic growth implies greater availability of public resources to improve the quantity and quality of education, health and other services • At the micro level,