Emmanuel Misdiagnosed France Ailing Economy -Myassignmenthelp.Com

Question: Discuss About The Emmanuel Misdiagnosed France Ailing Economy? Answer: Introduction Business cycle is the fluctuation in the economic activities and its effects that economy faces. The fluctuations in various economic activities of the business put them in different phases such as prosperity, recession, depression, recovery and expansion. From the economic data of France it can be stated that the country is in the phase of recovery. This can be seen from various economic indicators of the economy. The first indicator is GDP that shows that the economy has experienced a sharp rise in its GDP in 2017 compared to a drastic fall in 2016. GDP rate increased from 0.1 percent in 2016 to 0.6 percent in 2017. On the other hand, the economy has also experienced a drastic fall in its unemployment rate in 2017 compared to 2016. The unemployment rate reached at 10.2 percent in 2016; however it came down to 9.5 percent in 2017 (Tradingeconomics 2018). The fall in the unemployment rate was creation of new jobs and increasing spending of the government. Thus, due to both the econom ic factors there was a rise in the demand of the people in the economy. Changes in these factors were the signals that the economy has recovering from a depression or recession stage. From the above data it can be seen that France is in recovery stage I which the economy is recovering from a stage recession. This is evident from the increase in GDP growth rate and fall in unemployment rate. This shows that rise in GDP has led to an increase in the income of the consumer and spending power of the consumers. in addition to this fall in unemployment has been due to creation of new job opportunity n the economy. This too added to the money in the hands of the people. Thus, the rise in purchasing power leads to an increase in demand from the side of the consumer in the economy (Rao 2016). Thus, this leads to a upward shift in the aggregate demand curve of the consumers in the economy. On the other hand aggregate supply remains fixed due to no effect on the total supply of the economy with an increase in GDP in the short run. Economic growth of a country depends on various factors that lead to its growth in a period of time. There are various factors that contribute to the economic growth of the country such as real GDP, Real domestic output, price level, employment rate, interest rate and others. These are the factors that affect the economy in both short run and long run. An increase in the economic growth rate in other words is called as an increase n the annual rate of real GDP. This is because an increase in the productive capacity of the economy and increase in consumer spending. On the other hand an increase in employment or reduction in unemployment also causes an increase in the purchasing power of the people showing the growth of the Business. These are the factors that affects the aggregate demand curve leading to an increase or decrease in economy. However, there are certain factors that affect the long run aggregate supply curve and long run economic growth. The factors that affect the long r un economic growth are level of infrastructure, technology development and others (Theweek 2017). Thus, it can be suggested that France should focus on increasing their government spending in productive areas so that there can be technological development for long term growth and also improve short term demand of the economy. Labor play a crucial role in the economy as it helps in the development of various aspects of the economy. Labor is used in every major and small industry of the economy. Thus, instead of taking up planned reforms to the labor market the economy can take up educating workers in the economy. This will help in increasing the skills of the labor and increasing infrastructure. Educating their employees will have a long-term effect on the economy. This is because educated employee will be much skilled from before. This will help the economy to take up new technology for the economy so that they can be productively more efficient. Educated employees are also more productive than the uneducated and semi skilled ones (Mankiw 2014). This is because by being more skilled will enable them to use better technology and produce more number of goods than they used to produce n the absence of such technologies. Moreover, educated and skilled workers will never fear of losing their jobs as they will have the ability to fix themselves in any kind of jobs. This will save them from getting exploited by the employer and work at a lower wage rate. References Mankiw, N.G., 2014.Principles of macroeconomics. management Learning. Rao, B.B. ed., 2016.Aggregate demand and supply: A critique of orthodox macro economic modelling. Springer. Theweek.com. (2017).Emmanuel Macron has misdiagnosed France's ailing economy. [online] Available at: https://theweek.com/articles/705135/emmanuel-macron-misdiagnosed-frances-ailing-economy [Accessed 2 Feb. 2018]. Tradingeconomics (2018).France - Economic Indicators. [online] Tradingeconomics.com. Available at: https://tradingeconomics.com/france/indicators [Accessed 2 Feb. 2018].