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The natural rate of unemployment is defined as the rate of unemployment that exists when the labour market is in equilibrium. In figure 1 we can see a graphical explanation of this concept; the lateral dista...

Aggregate demand is the total demand in the economy. It is calculated as C+I+G+(X-M), where C is consumption, I is investment, G is government spending, X is exports and M is imports. The value of all is cal...

Factors affecting supply will shift the supply curve in or out. These factors are costs of raw materials, technological advancements, wages. Factors affecting the elasticity of the supply curve will affect t...

One argument against increasing the budget deficit is that and increase in government spending crowds out the private sector. This is when government spending fails to increase overall aggregate demand becau...

Fiscal Policy is policy designed by the government in order to influence levels of government spending and taxation. In an expansionary fiscal policy the government will opt to increase government spending o...