Extension Of The Different Models Of Macroeconomics

Extension of the different models of macroeconomics

Introduction

In this essay we will see the different models of macroeconomy

The primary objective of this work is to assimilate, learn, describe and understand the definitions, concepts, stages, conclusions, etc. of each topic to study;For this, each topic and sub -theme of the present must be broken down and explained with understandable and clear words;To give a more precise and concise idea of each concept to study.

In this work, I want to share, my point of view, opinions, I have mainly on the topics to be taught about the research carried out that was carried out from the topics suggested by the institution, I also do my research to understand and assimilateA little more themes.

Developing

The consumption function is a creation of the English economist John Maynard Keynes, appears for the first time in whose book he wrote the general theory of employment, interest and money of 1936.

The consumption to which it refers is to private consumption, that is, our families that represent the intention of spending of our families in goods and services to meet our needs.

Such as food, drink, clothing, footwear, etc., Consumption is one of the stages of the economic process, which generates work to the shoemaker, the shopkeeper, agriculture, etc. It is a circle that benefits us all as consumers and providers of some service, it drives the national and international economy, since many of our products are engaged abroad.

Such as:

1. Beer, the queen of drinks
2. Avocado, green gold.
3. Jitomate, exceeded by China.
4. Tequila, unique in the world.
5. The flesh that feeds EE.

Mexico is characterized in the world for its natural wealth and is one of the countries that most field and water products export which help us in the economy of our country, although Mexico is also one of the countries that has as customers that export exportVariety of products to us Mexicans, all this is summarized in a value chain or process of goods and service with the same purpose to meet our needs, as well as food and physical.

The demand for money

The terms of money and credit are used differently, since money as such is an asset and credit a liability, in our modern economy, most of what the role of money plays is the liabilities or credit of another, mainly of commercial banks, of which their main function is, to intermediate between the deposits and loans of the economy.

Credit is a liability widely used to regenerate wealth, since it instead of investing it in properties, or companies that have some profitability, use it as a loan, a liability that in turn is an asset, which organizations or lenders generatelarge profits.

Every organization, which offers its services as a lender manages a cup of interest.

The interest

In simple terms, interest rate is defined as: the index managed in the economy and finance to record the profitability of a saving or the cost of a credit, it has a direct relationship between money and time.

The time and its interest rate can vary in quantity, $ since at shortMore money turning that liabilities into active, since its loan is used or invested in industry either micros or macros companies.

When creating a macro or micro company, it generates employment, for many people, and new service is offered either for human or animal consumption which is another issue to address, since many farmers obtain some loan or government support from the Government

The ejido is a type of land in Mexican legislation, mainly associated with revolutionary agrarian reform, which projected the agrarian law of 1915 as a collective, undivided land and without the possibility of selling or inheriting.

But which can take advantage of their personal benefit, lands which can work in different ways but without the possibility of selling or inheriting them, this has greatly increased the economy of indigenous peoples, I even of peoples with a poverty indexnot so high.

The theory that deals with money apart from the goods and services that we can obtain, highlight two particular characteristics.

The first is that money is accepted as a means of changing goods and services and, the second, which can be greatly predicted, its market value. These two characteristics, which are usually jointly called liquidity.

The money supply process

The money supply is constituted by the sum or amount of money that a country has, or goods that it generates, a vast economy, in the case of Mexico is the export of oil and other products, and services that are provided to other countries, althoughOur country is in a decline, quite high economy for the great debts we have with foreign countries.

This my same leads us to change operations, which refers to the purchase and sale of foreign products, which goes to the central bank which its primary objective is to maintain the stability of the purchasing power of the country’s currency, it issay control inflation, and provide the national currency economy.

There are different definitions of the money supply, depending on whether or not they are included, those are the assets considered almost money, the most restrictive definition of money supply, called M1 which is a monetary aggregate, is the sum of money, is the sum of moneyin circulation and the living balance of the most liquidity liabilities of the financial institutions as we saw in the previous issue.

Fully liquid assets (tickets and coins), as well as the sight deposits that, as already indicated, are fully liquid. Broader definitions (m2 and m3), take into account those other assets that are characterized by their high liquidity and little risk.

The M2 is a slightly broader definition of money supply since it integrates the money we have in deposits in our banks, which are expiration less than 2 years

M3 This is the broader definition of money used in the Eurozone. Add to M2 the money invested in other financial instruments (not only in bank deposits)). In what fundamentally instruments the money invested

Our money can be deposited in bank accounts and we have already seen that, depending on the type of deposit, we can receive some remuneration. Now, this is usually very small

Therefore, we can better opt for investing money in other financial assets, such as monetary investment funds or in the purchase of public debt titles (such as the letters of the Treasury) or private (business promissory notes) of expiration in short maturityterm.

Economic growth in the medium and long term 

Long -term economic growth is the sustained increase in the amount of goods and services produced by the economy, that is, what our country generates, as are national companies, this gives us a more sustainable economy, since each timeDifferent sectors of the industry are committed, and good benefits are expected both in the short and long term.

Undoubtedly, the greatest approach is the food industry, and with technological advances, they make everything easier for agriculture by arming it with large machinery, obtaining higher cost at low cost, although it can be a double -edged sword weapon,

One of the big problems of technological advance is that only the great industries benefit from this, since for the people who worked the fields which were replaced by large machinery, and the exploitation of the lands since everythingWhat is used is not always renewable.

Having a larger industry also implies larger expenses thereCheap the use of land and the services they provide, foreign companies end with our natural resources, although many are focused by norms of the mimo country or state where they are established to carry out proper functioning and guidelines in terms of nature and resourcesNatural.

Another clear example that not everything that is spent is renewable is coal, oil, anché water is renewable and can lead to great process to make it drinkable again, it remains a problem since many companies mostly foodor animal benefit contaminates and use much of the state or country water where it is established.

Broadly speaking economic growth, like everything in life is something that benefits us, but also directly or indirectly affects us all.

Economic policy

Economic policy is the state intervention tool in the economy of a country to achieve its objectives,

Economic policy has as its objectives, full employment, price stability, and economic growth, tasting tasting aims at the same purpose, which is the economy of a country or state

Different types of politics: i

• Fiscal policy
• Monetary politics
• Foreign policy

Economic policy is understood as the set of shares in (variables) are those that reflect the behavior on the macroeconomic phenomenon an example would be inflation.

As we saw before there are types of policies called interventionists, which are based on the Keynesian model, which defines the coexistence of politics in everyday and economic life

But from the decade between the 70s, and 80, the approach has been criticized by the followers of neoliberal thought, is the capitalist economic and political current, inspired and responsible for the resurgence of the ideas associated with classical liberalism, neoliberal thinking defendswhich are the private economic agents that must decide the guidance of the economy.

adducing excessive bureaucratization, and to the inflationary tendency of political action, its proposal is aimed at eliminating the great degree of public administration bureaucratization

Fiscal policy 

Fiscal policy: set of measures and instruments that the State uses to obtain income (mainly, through tax collection) and the application of public spending in order to obtain a growth of production, reduce unemployment and achieve stabilityof prices.

Fiscal policy has just had many tasks, but its main objective is the growth of the economy, and protect it from the possible fluctuations of economic siclos, which are simple accelerations and decelerations in economic growth rates, economic inflation is no morethat the variation of values (ups and downs), of the macroeconomic indicators.

But this variation also results in supply as in aggregate demand which refers to the amount of goods or services that are requested or desired in a certain market of an economy at a specific price. Offer, refers to the amount of goods, products or services offered in a market under certain conditions, such as product quality either edible, food, or personal things

All this means that there are great difficulties for this balance situation to be maintained permanently with the simple functioning of the market, leading to economic fluctuations: when demand is insufficient, an increase in unemployment will be caused and when aPrice elevation (inflation).

As a consequence, of inflation since as we mentioned before when the demand is insufficient there is a large unemployment rate that leads us to rural areas in which a lot of foreign company is established by the unemployment rate in the place, for its goodsNatural, and by the cheapest labor.

All this has a lot to do with fiscal policy, and goes hand in hand with inflation since in Mexico companies from different countries produce low cost products for the company, but at a high price for the population.

While public spending includes all those expenses made by the public sector of a country, over a year, to develop its economic function, public income is the resources that the State and other public entities obtain to finance public expenses

Monetary politics

Financial monetary or political policy is a branch of economic policy that uses the amount of money as a variable to control and maintain economic stability.

In order for a country to implement its macroeconomic policies, the economic authorities use a set of variables called economic policy instruments, among which taxes, public spending, amount of money and exchange rate stand out. Depending on the circumstances experienced by economies, policies are elaborated, aimed at strengthening, changing or ratifying economic policies applied previously.

Thus, to successfully apply a macroeconomic program, economic policy is classified into three major axes to achieve macroeconomic stabilization and obtain confidence from the public to achieve sustainable economic growth and achieve economic and social development and social development.

Objectives of monetary policy

• Control the inflation:

Maintain the price level in a stable and reduced percentage. If inflation is very high, restrictive policies will be used, while if inflation is low or there is deflation, expansive monetary policies will be used.

• Reduce unemployment:

Ensure that there are the minimum number of people in unemployment, so that expansive policies that promote investment and hiring will be used.

• Achieve economic growth:

Ensure that the country’s economy grows to ensure employment and well -being. For this, expansive monetary policies will be used.

• Improve the balance of payments:

Watch that country imports are not much higher than exports, because it could cause an uncontrolled increase in debt and economic decrease.

This last point is what happened with our country in recent times, the federal internal debt of the public sector was very large which affected the economy of all Mexicans since inflation has been quite high therefore pay taxes for everythingAn worker with the average salary pays more taxes than he earns annually.

This has led to the economy, since low -income people live up to date, with the minimum wage and paying very high taxes, to this is added a lower purchasing power to have a more dignified life, everything deriveshow different policies are handled, and how their actions are handled, since the good management of them.

Control the amount of money that circulates in an economy and the interest rate paid for it are the fundamental variables about which the monetary authorities affect to achieve the well -known macroeconomic objectives economic growth, price stability and full occupation.

conclusion

The different branches of macroeconomics are quite complex, and on certain occasions difficult to understand, and apply, however, they are necessary for every Mexican and everyone and as our laws and reforms were gradually forming and the way ofsubsist in the economy for the growth of our country and the world.

In the economic factor, it is very important for every individual to know all this type of issues and as Mexicans, lead a dignified life, for all without distinction of social status, it is important to carry out a control of our resources, such as water, fuel, electric light, etc. And knowing how little by little it was forging laws that made growth in Mexico and the world possible.

As the economy of a country was forged based on industry and the currency of exchange since, in ancient times, the national currency was not used but that the obtaining of goods and services were done through bartering which implied, arduous work and changes in material goods.

Undoubtedly, the Administration, and its courage.

Bibliography

• José Antonio Medikute. (2016). Economic analysis in portions. December 31, 2016, from Éibar, Gipuzkoa, Spin Website: http: // jamendikute.Blogspot.com/2016/12/alternatives-of-economic-economic.HTML
• Carlos Rodríguez Ramos. (2005). The stability of the real demand for money. 2001, from Econoquantum Website: https: // www.Redalyc.org/article.OA?ID = 125015747002
• Juan Castañeda. (2012). Definition of bank money. October 22, 2012, of orofinanzas Website: https: // www.Oroyfinanzas.com/2012/10/definition-m1-m-m-m3- money-branch/