Ask an Economic Question

You are welcome to ask any questions on Economics. Though you might also like to try google custom search (top right) to see if the topic has been covered before.

I am looking to explain economic principles / ideas/ recent developments in economics. I can’t promise to answer, but will try if it meets the criteria below.

  • Please don’t ask me to do your coursework / assignment e.t.c. (I can usually tell if it is a homework question!)
  • Please don’t ask any maths calculations.
  • The question and answer will be published here where everyone can see it (including your teacher!)
  • I aim to try and simplify economics; as a rough guide I would aim at an understanding similar to a good British A Level student.
  • I am looking to explain economic principles / ideas/ recent developments in economics.
  •  I will answer as a new post, if you leave email address, I’ll usually send quick email. Check home page of blog for new post. With question and answers

Add comment at bottom of post.


2,018 thoughts on “Ask an Economic Question”

  1. How does a business be able to offset the impact of diminishing marginal returns by sourcing its inputs from more than one country?

  2. helloo sir.I want to ask from you that how can i do monoplostic competion between two copanies.
    e.g i have taken samsung and huawie.three products of each company.i have information about their features and comparision between them.kindly help me how can i do monoplostic competion between them. your help will be greatly appricated,

  3. Sir,
    I m from Pakistan. You might know that my country is under a heavy EXTERNAL DEBT. One thing is not getting clear to me regarding the External Debt:
    When our government gets a loan from a foreign country, it will have to be paid back by our govt in the subsequent years. And this will be a liability on our government. And this will be called External Debt. However, when our imports are larger than our exports and all the imported items relate to private individuals of Pakistan, then it will be a trade deficit. Suppose the value of this trade deficit is five billion. Will this 5 b be included in our External Debt?
    Thank you!
    Yours sincerely,
    Asif Khan

  4. For developong countries i particular economic growth must be always the most impprtant macro policy objective. With vivid examples to what extent do you agree with this statement?

  5. Which price index (RPI or CPI) accounts for all households and which only covers the average household.

    In different textbooks it states different things

  6. Hi Sir
    Could yu please tell me how an increase in the minimum wage rate would affect market price, market quantity, consumer surplus and producer surplus for a product?

  7. I need to understand the below concept better:
    When a country is operating a fixed exchange rate, and higher interest rates come into play, there will be hot money flows increasing the demand for the currency putting upward pressure on the fixed exchange rate. This upward pressure will increase the price of exports and reduce the price of imports, thus INCREASING IMPORT EXPENDITURE. But higher interest rates – cost of borrowing increases and consumption reduces, thus REDUCING IMPORT EXPENDITURE. On the other hand, higher investment spending (this factor is devoid of the interest rate increase mentioned earlier) would raise national income, thus INCREASING IMPORT EXPENDITURE. There might also be the case of higher investment spending resulting in capital equipment being imported, thus INCREASING IMPORT EXPENDITURE.

    What I’m confused about:
    If the country has a current account surplus on its balance of payments, which factor (higher interest rates or higher investment spending) is MORE LIKELY to reduce this surplus?

    • You can’t definitely say. But, the effect of higher interest rates on reducing consumer spending is likely to be the highest. Higher investment spending could also spur economic growth, which encourages some import spending.


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