Micro economics Essay Example | Topics and Well Written Essays - 1500 words

Micro economics - Essay Example entirely the other side of picture is also being supportedby many economists. They are of the emplacement that UK is still in the grasp of triplex dip depression. According to a study, in the year 2008 peak the growth compute of economy was less than 20.1% and in the year 2010, the overall growth consec prise is some 6.1% which shows a sedate plunge during the great depression. International monetary fund issued a forecast about the growth rate in between 0.6% to 0.8 % and this is not considered as a gratifying rate. Since 2008, the government of UK has stimulated up to 380 one million million million pounds into the economic machinery to increase liquidity rates but due to the lack of trickle down effect, the coin has not shown its benefits and didnt reach the core level of the industries. Many unconventional and out of the way timbre and initiatives are being taken to solve the problem of liquidity. Massive job lose statistics showed that th ere were around 750,000 public sector jobs that were cut off but this problem has been sorted out after the covenant between democrats and conservatives. During the nine months of double dip depression, the economy of UK shrank up to around 1.1 pc (Kirby et al, 2011) and there is straight a rise in the growth that shows that depression has ended. The economists are feeling the fear that the depression screw come because economic depressions re-appear and do not go away easily. The measures by the ONS say that the economy grew by 0.7per capita and many other independent sources for example a renowned economist named as Samuel Tombs is supporting the view that growth pass on touch around 0.6pc. Till 2012, depression was still badly affecting the UKs economy as this was the consequence of bankruptcies of major banks like Lehman brothers and the stock markets of UK were falling to the lowest records since the great depression. The measures from NIESR says that double dip depression was still there until September 2012 as after pumping thousands of dollars in the banking systems , there was no rise in the growth of the economy (Hay, 2012). Question 2 There are mainly cardinal categories of unemployment, as follows 1) Structural Unemployment 2) Frictional Unemployment 3) Cyclic Unemployment 4) Seasonal Unemployment (Boyes& Melvin, 2012) The first sheath of unemployment is when the competent work multitude is available but there is a huge lack of demand for them. This kind of unemployment is highly proliferated in the world. The second type refers to the unemployment that is caused due to high switch rate of employees between different jobs. The third type is because of the effects of overall growth of the economic conditions and fourth type is because of the fluctuations of international economic trends and developments. Diamond Mortensen Pissarides (DMP) role model illustrates the unemployment as a function of limited variables ad the rate of unemployment is directly proportional to the number of variables. If plurality have limited means and skill sets, unemployment will expand automatically. This model is regarded as the most hardheaded one. According to DMP model, the bargain rate between employee and employer is also affected due to unemployment rate. If unemployment rate is high, bargain will be low because hiring is a difficult process altogether. As shown in the above figure, if the productivity in decreased, there is also a decline in Nashs wage line. A high rate of wage line depicts less unemployment and sound economic condition