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Economics Articles

Essays on topical issues, latest developments in UK and global economies, and answers to readers questions

Factors that influence saving levels

Posted on April 6, 2019

Household saving is defined as income that is not consumed. Savings can be kept in cash form, saved in a bank account or saved in long-term assets, such as government bonds. Quick summary of factors that influence saving levels Interest rates – higher interest rates makes saving more attractive. Rising income enables higher saving. People …

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Shortages

Posted on April 4, 2019

In economics a shortage occurs when demand is greater than supply, causing unfulfilled demand. A shortage can occur due to Temporary supply constraints, e.g. supply disruption due to weather or accident at a factory. Fixed prices – and unexpected surge in demand, e.g. demand for fuel in cold winter. Government price controls, such as maximum …

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Facts about monetary policy

Posted on March 31, 2019

Monetary policy involves influencing and controlling the money supply/interest rates to target inflation and economic growth. Monetary policy primarily involves changing interest rates, though it can include other tools such as quantitative easing and open market operations. In recent decades there has been a trend to making Central Banks independent and responsible for setting interest …

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