Cyclical Fluctuations in the Economy Essay Example | Topics and Well Written Essays - 1000 words

Cyclical Fluctuations in the Economy - Essay Example The supply side shocks such as the improvements in technology or the raging oil prices affect the costs and prices in different countries. These supply side policies may then have an internal affect on the interest rates, exchange rates etc to becoming either beneficial or causing damage in the own country. In effect the cyclical fluctuations in the economy may be expected, however activities are so interconnected that changing one variable for the better usually upsets other variables. These cyclical fluctuations can be divided into 4 consequences. These consequences are handled by the macroeconomic policy of the government. (objectives of government macroeconomic policy, 2008) These objectives seem hard to achieve in the light of the cyclical fluctuations in the economy, however the government needs to apply the macroeconomic policies with hindsight and foresight to fully reap the benefits of the economic system. The main objective that all governments want to at least achieve is to increase the growth rate of the country without increasing the inflation. This is the real growth, while with inflation the growth is cancelled out with the rising prices of commodities. Monetary policy is "the policy carried out by the central bank to manipulate interest rates and credit conditions, in order to influence the general level of economic activity. Monetary policy is a powerful tool for influencing the level of employment, economic growth and the rate of inflation." (GOIAM) The government should lower the interest rates. This will eventually direct the growth towards the rise in consumer and business capital spending. When this happens the national income rises making the people spend more and increase the economic activity. Since investment spending results in a larger capital stock, then incomes in the future will also be higher through the impact on LRAS. The people would spend more rather than keeping the money in the banking systems as the return on investment isn't high. With the increased economic activity, the country will boom and the growth will increase. Eventually this growth would need to be sustained, which can be done through the use of microeconomic policies such as supply side and monetary policies (GOIAM). Therefore when the interest rates need to be reduced without changing the inflation rate by using the expansionary monetary policy, the aggregate demand will increase. On the other hand if a contractionary monetary policy is used, th e spending will decrease and the aggregate demand will decrease. (Weerapana, 2002) (Source: Weerapana, 2002) Fiscal Policy Fiscal policy is the policy used by the government to control the total level of economic activity in a country. It "involves the use of government spending, taxation and borrowing to influence both the pattern of economic activity and also the level and growth of aggregate demand, output and employment". An expansion in fiscal policy by increasing government spending will contribute directly to aggregate demand. This demand is good for the country as it would give an opportunity to the industry to boom and make more efficient use of their systems to cater to the demand. However if the government spendi

Thames tunnel (london) Research Paper Example | Topics and Well Written Essays - 3000 words - 1

Thames tunnel (london) - Research Paper Example The tunnel measures 11m (35 feet) wide 6m (20 feet) high and 396 m (1,300 feet) long (Teape 6). It runs a depth of 23 m (75 feet) below the surface of River Thames when measured at high tide. In early 19 century, there was no land that could connect the South and north banks of the Thames and to connect the expanding docks on either side of the River. The port of London the main hub of across the entire British Empire and the business worldwide. Any bridge constructed was supposed to allow ships that had masts over one hundred feet tall to be sailed under them yet there was no available technology if the Tower bridges lifting bascules to early engineers (Will 15). It could not be possible for a horse to pull a cat that was loaded up through a steep hill up to 100 feet into the air at a gentle slope. The approach ramps needed to be very long, which made in impractical. This pressing need so Engineer Ralph Dodd develop a tunnel to between Tilbury and Gravesend in 1799 (Teape 6). This first attempt did not succeed. Later (1805-1809) a group of Cornish miners being led by Richard Trevithick made another attempt of digging a tunnel upriver between Limehouse/Wapping and Rotherhithe. The equally encountered difficult conditions and failed. As Cornish miners, they were used to dealing with hard rocks. They needed to modify the methods they used in digging hard rocks to enable them to deal with quicksand and soft clay (Teape 8). There was also the problem of the flooding of the initial pilot tunnel. It was reported that after 1000 feet of the total 1,200 feet became flooded, the Thames Archway project was abandoned. It measures 2 to 3 feet by 5 feet, and was intended to be used for a passenger’s use. The failure of this early project made engineers to come to a conclusion that constructing an underground tunnel was impractical. However, Marc Brunel , the Anglo-French engineer, could not agree to this.