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4/12/2020
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RUNNING HEAD: MACROECONOMICS
Introduction:
Macroeconomics is the mega domain of economy of a country that deals with the inflation rate
growth rate, national income, per capita income and unemployment rate in the country. All of
these concepts and economic systems are interconnected and interrelated. They are all connected
in a chain. The change in one segment of the economy will make some changes in other domains
of the economy as well, such as, the change in the plan of note issue or some amendments in the
monetary policy of the country will affect the rate of inflation in the country, the inflation rate is
connected with the unemployment rate in the country, the unemployment rate is connected with
the per capita income and this process of connectivity goes on and on. One cannot study the
economy by just studying a single element of the economy. Pakistan is a developing economy.
The economy of the country had seen many ups and downs by the past decades. The country
came into being on 14 August 1947. From the commencement of the country until today, it had
seen many trails that had damage the economic progress of the country. The country had seen
constant 3 wars with the neighbouring country India, Apart from that they became an ally of the
USA, in Afghan and USSR war. They then became the key participant in the War of terrorism.
These defensive acts and incidents had damaged the economy of the country. There are
constantly seeking forward for the loans and relief funds from the IMF and World Bank (Anwar
et al., 2017). In 2019, they had again applied for a loan from IMF to clear their balance of
payment, which was pending. Apart from these issues, the country had seen political instability
and lack of constant and proper leadership since the commencement of the country. There are
three main factors of the macroeconomics that help to determine the economic condition of the
country, there are the inflation rate, unemployment rate and growth rate of the country.
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RUNNING HEAD: MACROECONOMICS
Inflation is the concept of economics, it deals with the constant increase in the prices level of the
products in the country. A country needs to raise the prices with the change of time, but the rapid
change in the country can damage the economy of the country. The inflation rate in the country
can be determined by the help of the flow of money with in the country. The process of note
issue also affects the inflation rate of the country (Ayyoub et al., 2011). There is a concept, that
is opposite of inflation, the process is known as deflation. By deflation, one means the constant
decline in the price value of the country, this is dangerous than the inflation in the country.
That’s why the policy-makers and the economist of the country should make such policy that can
maintain the flow of money in the country and control the inflation rate. Pakistan’s inflation rate
is 7.34% in 2019. It had raised by the year, as the inflation rate of the country was 3.93% in
2018. It had raised in 2019, that is the sign of economic instability in the country.
economics by unemployment means the total number of eligible people in the country that are
willing to do a job they are jobless or doing a job on the level lower than their qualification. This
concept is known as unemployment in the country. It is the situation when people wants to do a
job, they are capable to do a job, but there is constant unavailability of job in the country (Ahmed
et al., 2014). The unemployment rate of Pakistan had fallen slightly, it decreased from 3.04% to
3.02%. It was 3.04% in 2018. In 2019 it is 3.02% as per the economic survey of Pakistan. It is a
good sign, as the unemployment rate falls in a country, it helps to increase the per capita income
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RUNNING HEAD: MACROECONOMICS
The growth rate increases in the rate of the gross domestic product of the country. It is a sign of
progress of a state. The country with lesser growth rate shows the economy of the country is not
progressing, but rather than progressing, it is moving slowly. This shows the economic instability
in the country. The higher the growth rate of the country the better the economy will be. It helps
to determine the level and speed on which the country is progressing and developing. It shows
how much increase has been made in the gross domestic product of the country. The growth rate
of Pakistan had fallen. The growth rate of the country in 2019 is 3.3%. whereas the growth rate
in 2018 was 5.8%. This is the negative sign for the economy, as it shows that the economic
progress of the country had slow down. It shows the link of the country with some economic
UAE is also a developing economy. It is the second most progressive and developed economy of
the Middle East. The country had made progress by all these passing years. Because of the global
economy and the recession, the country had seen some economic instability in 2017, some
companies had fallen on the shutdown condition. They are compelled to do downsizing and it
had raised the level of unemployment in the country. But, by 2018 to onward, the country is
making progress again. The economic statistics and ratios are getting better by each passing day.
The economy of UAE is better than the economy of Pakistan as more people are willing to invest
Some comparison of the key economic factor of both of the countries are given as:
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RUNNING HEAD: MACROECONOMICS
1. The growth rate of UAE is 2.3% in 2019 as per the data provided by the central bank of
Dubai. Whereas the growth rate of Pakistan had declined in 2019, but it is still better than the
2. The unemployment rate of the UAE is 2.64% in 2019, whereas the unemployment rate in
Pakistan is higher than that of the UAE. The unemployment rate in Pakistan is 3.02% by 2019.
3. The inflation rate in the UAE is -1.5% in 2019. The rate was 3.07% in 2018, whereas, the
inflation rate in Pakistan has increase and it is 7.34% by 2019. The inflation rate of Pakistan is
disastrous as it is really bad for the economic growth of the country, whereas the economy of
UAE is facing the trend of deflation, that is also not favourable for the state (Economic survey of
UAE, 2019).
References:
Ahmed, Rizwan & Aqil, Muhammad & Qureshi, Munawar & Qadeer, Seemab. (2014).
Sciences. 4. 676-682.
Anwar, Sofia & Abbas, Qaiser & Ashfaq, Muhammad. (2017). Introduction to the Economy of
https://www.researchgate.net/publication/321037817_Introduction_to_the_Economy_of_Pakista
Ayyoub, Muhammad & Chaudhry, Imran & Farooq, Fatima. (2011). Does Inflation Affect
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RUNNING HEAD: MACROECONOMICS
https://www.researchgate.net/publication/263729192_Does_Inflation_Affect_Economic_Growth
_The_case_of_Pakistan
http://finance.gov.pk/survey/chapters_19/Economic_Survey_2018_19.pdf
http://www.finance.gov.pk/survey/chapters_19/Economic_Survey_2018_19.pdf
Shabbir, Malik & Zeb, Aniqa. (2019). Impact of Economic Stability on Male Unemployment: A
https://www.researchgate.net/publication/333506935_Impact_of_Economic_Stability_on_Male_
Unemployment_A_case_of_Pakistan