A rapidly developing country has hired you to present a specific strategy for keeping their inflation...

A rapidly developing country has hired you to present a specific strategy for keeping their inflation and unemployment rates low while maintaining a healthy rate of GDP growth. Please describe in detail at least four things that can be done to accomplish this.

Expert Solution

Below are the things that a developing country can do to keep their inflation and unemployment rates low -

1. Encourage financial institution: Having more financial institutions will encourage the process of capital formation as the savings from household sector gets channelized towards capital formation. The financial institution such as banks serve as an intermediary in this respect.

2. Investment in social sector: Social sectors such as Health and Education carry positive externality that can last for years. A strong health sector improves productivity of labor as less working hours are lost due to a sickness. A good education sector improves labor productivity and also produces labor stock for private sector.

3. Inflation rate targetting: The central bank of this country can adopt an inflation targetting regime so that whenever the economy overheats, the central bank can act by taking appropriate measures and hence tinker with interest rates.

4. Discourage consumption driven govt debt and fiscal spending- Excessive govt spending that is not financed by the tax receipts crowds out the private investment. This can result in accumulation of debt which has intergenerational effects in terms of higher taxes in future.

Rahul Sunny answered 1 year ago

You are hired as an economic consultant by a developing country that is experiencing high rate...

You are hired as an economic consultant by a developing country that is experiencing high rate of unemployment, widespread poverty, and out-migration. What economic strategy would you formulate to achieve higher economic growth in the long run aimed at raising the standard of living of the country's population? What effect the prescribed policy measure would have on the nation's PPC?

a case study with research San Pico is a rapidly growing Latin American developing country. The...

a case study with research San Pico is a rapidly growing Latin American developing country. The country is blessed with miles of scenic beaches that have attracted tourists by the thousands in recent years to new resort hotels financed by joint ventures of San Pico businessmen and moneymen from the Middle East, Japan, and the United States. Additionally, San Pico has good natural harbors that are conducive for receiving imported merchandise from abroad and exporting merchandise produced in San Pico...

Present and discuss an illustrative example in a specific country of Neoclassical policy in Macroeconomics

Which country/economy has applied the Neoclassical approach on Macroeconomics to promote long-term growth? Present a specific...

Which country/economy has applied the Neoclassical approach on Macroeconomics to promote long-term growth? Present a specific example.

Coors Brewing Company has hired you to advise them on an expansion strategy to grow their...

Coors Brewing Company has hired you to advise them on an expansion strategy to grow their business by 20% while maintaining costs within 5%. Considering each foundation (Businesses / Organization; Competition; Market Forces; Prospects & Customers) and any sub-groups, list the top 10 KPIs you recommend tracking. Explain how your selection helps Coors identify strategic opportunities and optimize the strategic plan once it’s in market.

The Fed has the twin mandates of achieving both high employment and keeping low inflation. Many...

The Fed has the twin mandates of achieving both high employment and keeping low inflation. Many central banks only have price stability as the primary goal. Given its control of the money supply, they will have more influence in that area. When the economy experiences stagflation, the policies for lowering unemployment and lowering inflation are contradictory. If this situation were to occur, which one do you think the Fed should focus on first?

Keeping in mind Harley Davidson's Generic Strategy and Value Chain , what do you think are/is...

Keeping in mind Harley Davidson's Generic Strategy and Value Chain , what do you think are/is the company's core compatency/ies? Discuss what some of the challenges the company faces in view of changing market conditions. What advice would you give Harley in terms initiatives they might undertake to continue to grow?

Elaborate on specific areas that you anticipate to be a challenge in developing a portfolio and...

Elaborate on specific areas that you anticipate to be a challenge in developing a portfolio and what steps you can take to overcome those challenges. Requirements: 250-300 words for the initial post, 100 words for the reply * portofio focuses directly on promoting future career opportunities

Selecting a specific implementation strategy. What strategy would you select when a orgaization was predominantly a...

Selecting a specific implementation strategy. What strategy would you select when a orgaization was predominantly a structural frame team, but need to be a human resource frame organization in the same enviorment. Why you chose the specific implementation strategy. and how would you implement it?

For the US and the country you have chosen, gather data on inflation rates for the...

For the US and the country you have chosen, gather data on inflation rates for the most recent three years that are available. Please make sure that you note the specific price index that you are using and provide a description of the characteristics of that index, particularly for the country you have selected. Please make sure that you fully explain the information you are providing. What has happened to prices and how has this affected the broader economy; is...

Question