Macro Economic's questions Assignment Example | Topics and Well Written Essays - 500 words

Macro Economic's questions - Assignment Example Canada has experienced a decreasing interest rates and a relative increase in the GDP over the last decades. This has led to increase in the consumption expenditure and a rise in the investments as shown by the statistics by growth in the economy (Roberts, 2005).The adjustments have contributed positively to the economy as it resulted in the expansion of various sectors hence high GDP. Introducing insurance will reduce the employees’ salaries that will eventually lower their income. This will reduce the level of consumption and investments in the economy under the business cycle leading to a recession. As a result, there is decrease in the production of goods and services in the economy reducing the GDP (Roberts, 2005). This will affects the economy in the long run as majority of the population may be rendered jobless leading to a rise in the unemployment’s rates due to the decreased output levels of the industries. Low interest rates have been maintained over the past but have only resulted in low economic growths. This has been attributed by the decrease in the domestic demands by individual countries as a result of the low activities by the private sectors as low rates discourages investments (Roberts, 2005).Various countries also experience high depts. hence despite the expansionary measures most of their resources are allocated to settling deficits as a result of the world economic recession leading to low growths. Free trade is opposed since it results into the collapse of the local industries and less producing nations becoming dumpsites resulting in increase in the unemployment rate. However free trade leads to competition that results into quality and relatively cheaper commodities for the population, corporation of the countries, removes trade barriers that leads to more disposable income for the consumers while