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

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2,452 thoughts on “Ask an Economic Question”

    • Movements are caused by changes in price, shifts are caused by non-price factors (for example there can be a shift to the right in demand if incomes increase, as people will have more money to spend)

    • movements of the curves occurs when a non-price determinant of either supply or demand changes (you can easily find the non price determinants of demand and supply on the internet). on the other hand, movement along the demand and supply curve occurs when the price either increases or decreases (see at law of demand and law of supply to find out the direction of the movement)

  1. If the government borrow to finance infrastructure investment, it can help boost the supply side of the economy and enable higher economic growth. If growth improves, then there will be higher tax revenues to pay back the debt.

    However, if the government is borrowing to pay pensions or welfare benefits, then there is no supply-side improvement, and it will be harder to pay back the debt.

    This is surely nonsense as everyone knows that all deficit spending is just the usual spending in to infinity that must be done otherwise we grind to a halt economically. Where does the prime ministers wage come from? It comes from deficit spending, NOT TAXES,. Anyone who still thinks that all spending of a deficit nature must be funded by taxes needs a white coat and a strait jacket since he is most likely barking bloody mad! or cannot count. Can you pay your own wages out of your taxes? NO I do not think so. Almost every privatisation to government as services provider is deficit spending? There is no chance that any of this is ever going to be paid by taxes, simply does not exist . Going forward we have less work available to us – not more, so where do such knuckleheads think such taxes will come from? It’s just a concept now aged and well ridden. Austerity creates depressions and depressions.

  2. Re your article on (repayment) mortgages:
    I once heard that, other things being equal / constant, in effective interest rate terms a nominal fixed rate repayment mortgage was more “efficient” for the borrower at the beginning or at the end of the term – except that I cannot remember which! It was to do with the relationship between the amount of interest and capital repayment contained in each monthly instalment, and how this proportion altered in the course of the mortgage term. Can you shed any light on this?

  3. As most countries, including your country, are dealing with the second wave of coronavirus, policymakers are
    faced with a trade-off between maximizing social distancing measures to suppress the disease and the need
    to maintain some sense of normal economic activity. Some pundits claim this to be a classic example of
    equity-efficiency trade-off in economic policies. As an “expert” in Economic Analysis and Policy what do
    you think? [15 Marks

  4. why the profit maximising rule of a firm according to marginal analysis is at the point
    where marginal revenue is equal to marginal cost (MR=MC)


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