Question

What are the best ways to solve macroeconomic problems? (500 words)

Answer 1

There are many ways to solve different type of macroeconomic problems -

1 )  Global poverty - One of the major macro economic problem . Design and distribute “radically affordable” products, water-delivery systems, and sustainable engineering projects for “the other 90%” of the world’s population who have little access to services common in the U.S. Providing them with equal opportuinity, focussing on there studies can alleviate poverty .

2 ) Unemployment - The idea seems to be coming up more and more that minimum wage requirements are keeping unemployment rates high. Some economists are suggesting that the minimum wage laws disappear, at least for teenagers, who suffer a much-lower rate of employment than the general public. But would scrapping the minimum wage, or lowering it to, say, $4 an hour for teenagers, get the economy humming along again?

3) Inflation - High inflation can be a serious problem if prices rise faster than wages and nominal interest rates. In periods of rapidly rising prices, people with savings will see a decline in their real wealth. If prices rise faster than wages, then people’s spending power will decline. So to control the inflation , Country can decrease the money supply , which lead to lower prices in Ad curve and will control the inflation .

4 ) Recession- A recession is a period of negative economic growth – a decline in the size of the economy. It exacerbates problems of inequality and unemployment. To fight with recession , there is a need of higher fiscal expenditure , which lead to shift of IS curve and will grow the output of the economy .