Macroeconomic Coursework Essay Example | Topics and Well Written Essays - 2500 words

Macroeconomic Coursework - Essay theoretical accountIn opposite words what macroeconomic theoretical shams seek to accomplish by way of supreme or stimulating variables such as inflation or/and offset are sought to be accomplished in a more articulate manner by these representative agent models. congressman agent models are in fact some efforts of economists to model and represent the macro economy as if it were a single unit. These representative agent models are ground on the basic tenets of the original models.On the other hand stimulative fiscal policy measures are adopted by governments in rejoinder to recessions or economic downturns. A recession, defined as two consecutive quarters of negative hoggish Domestic Product (GDP) harvest in a year, can be partially or exclusively reversed by using a combination of macroeconomic measures or solutions such as fiscal or/and monetary policy measures. At least this is the belief among economists though there can be a lot of ar guments to prove that it cannot be done as easily as its proposed. congresswoman agent models would necessarily require that some genuinely stringent assumptions are satisfied before the model is adopted so that outcomes could be predicted with a degree of certainty. Thus all representative agent models based on classical/neoclassical, Keneysian/neo-Keneysian and monetary theories assume that fiscal stimulus programs could effectively boost economic growth during a recession or an economic downturn. However, those assumptions that they require as essential pre-conditions might be very difficult to fulfill though.Fiscal policy involves budgetary measures in which the government carries through a deficit budget in order to stimulate the economy by charging lower corporate taxes. In other words fiscal revenue in the given fiscal year will be less(prenominal) than government expenditure on projects. These projects are naturalluy intended to stimulate spending and subsequent economic g rowth (Ertl, 2008). When the government spends more than what it