Macro economics short answers Essay Example | Topics and Well Written Essays - 250 words

Macro stintings short answers - try Example(15 points)Some institutions and institutional arrangements encourage economic growth. Institutional arrangements outline the formal and informal rules of the high that direct how people interact. These arrangements form incentives and outline expected and tolerable forms of behavior in social interaction. The institutions that boost economic growth includeProductivity is referred to as the ratio between the output measurement and the quantity of inputs. It determines how well production inputs, like labor and capital, are being employed in an economy to constitute a specified level of output. Factors that lead to increases in productivity include capital accumulation, more than accession to natural resources, technological innovation, novelty in labor processes like division and specialization, improvements in business practices and transformation in patterns of trade.Great depression was as result of crash of the stock securities industry. Once the stock market plunged, fearful that banks would fail, people started to withdraw their notes. Almost overnight, they put thousands of banks under threat. The more money people withdrew, the more banks failed, and the more banks failed, the more money people withdrew. By 1933, nearly 11,000 of the nations 25,000 banks had fallen. In pose to boost economic activities the Fed was to put in place policy measures geared toward increasing money supply in the economy but it did not do that in time leading to economic