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Micoreconomy Case

Autor:   •  June 4, 2012  •  Essay  •  2,186 Words (9 Pages)  •  861 Views

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Micro economic

We can analyze the influence of increasing money inside the market in two ways: first it causes to decrease the interest rate so people will prefer to investing as we can say in Macroeconomic it cause to increase (I) and totally the GDP will increases as this point of view the demand of industrial goods and capital goods like factory machines and tools will increase so demand curve for these type of products will be shift to the right. Second, we can analyze this policy on the consumer behavior of the America in their buying more products so its affects of the demand curve of the essential products.

Individuals, organizations and governments use capital goods in the production of other goods or commodities. Capital goods include factories, machinery, tools, equipment, and various buildings which are used to produce other products for consumption. Capital goods, then, are products which are not produced for immediate consumption; rather, they are objects that are used to produce other goods and services. These types of goods are important economic factors because they are key to developing a positive return from manufacturing other products and commodities.

Manufacturing companies also use capital goods. Capital goods help their company make functional goods to sell individuals valuable services. As a result, capital goods are sometimes referred to as producers' goods or means of production. An important distinction should also be made between capital goods and consumer goods, which are products directly purchased by consumers for personal or household use. For example, cars are generally considered consumer goods because they are usually bought by an individual for personal use. Dump trucks, however, are usually considered capital goods, because they are used by construction and manufacturing companies to haul various materials in order to make other products such as roads, bridges, dams, and buildings. Similarly, a chocolate candy bar is a consumer good but the machines used to produce the chocolate candy bar are considered capital goods. Capital goods are generally man-made, and do not include natural resources such as land or minerals, or human capital—the intellectual and physical skills and labor provided by human workers. The economic term 'capital goods' is not to be confused with the financial or accounting usage of 'capital', which may mean simply wealth or financial capital.

Because of the increase trend on investing and increasing the demand of the domestic production of capital goods so we have the shift on the demand curve

Now we analyze this shift in dept:

1. The price of own goods

As we know change the price of the goods didn't shift the demand curve. It effects on the demand curve is only

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