Macro Assignment Example | Topics and Well Written Essays - 1000 words

Macro - Assignment Example(Riecher, 2013) Figure 1 Unemployment Rate in Germany1 Germany has been able-bodied to deal with structural changes efficiently as its policy doesnt include laying off workers or else makes the work shorter hours. So when workers cut off their working hours, the government makes up half of the wages of muzzy working hours. This is a better alternative than being unemployed. Apart from that there a system know as hour bank where workers put extra hours during good beats. So these hours could help to compensate in d witnessturn where less hours is worked. Also the unions and management negotiate together on reducing working hours. (Baker, 2013) fit in to IMF Inflation in Germany by the end of 2012 was 2.137 percent and is evaluate by IMF that inflation will middling to 1.6 percent in 2013. The economy is growing but is non putting an upward pressure in price. This is because the government is able to control inflation because of its tight monetary poli cy where it has maintain its currency unbendable too. (Stefan, 2013) Figure 2 Inflation Rate in Germany2 Answer 2 Germany is a part of European Union so it does not have its own money and cant use its own monetary policy. It follows the policy that is set by the European Central Bank. Current Interest run maintained by the European Central Bank is only at 0.5 percent. ... So it is important for it to maintain equilibrize in provoke rate policy. (Stefan, 2013) Germany fiscal policy shows thats its revenue as by IMF data has over the years accounting to 1201.38 billion expected in 2013 that is 44.372 percentage of the GDP. Its government expenditure as percentage of GDP amounts to 45.005 percent in 2012 and 44.703 percent expected in 2013. Governments tall share in expenditure is having negative effect on growth rate as it is not giving a room for private investments which has been low around 17.219 percent of GDP in 2012 and expected 17.369 percent in 2013. Low investment mean s low domestic demand for goods and services which inevitably to be created by the government. Also the measure rate in Germany on individuals income is progressive, higher the income, higher the tax rate which ranges around 14 to 45 percent on individuals income. Effective corporate tax rate is around 30 to 33 percent. It needs to make sure to reduce taxes in order to advance more growth and investment in the economy. (Randow, 2013) Answer 3 Germany is the power house of industrial coarse and worlds second largest exporter. One policy Germans adopted was not to borrow money earlier they focused to live with their own means as taking debt meant paying back with huge interest costs. They consider taking loan as doing something wrong and feel guilty for it. Germany made its labour marketplace strong in 2003 when it came up with fundamental labour market reform. The government maintained good traffic with labour unions in order to easily negotiate on labour wages. At same time w orkers kept working hours low keeping in mind it was better than to getting unemployed. This helped the economy to negotiable in labour