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 so that 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.


2,583 thoughts on “Ask an Economic Question”

  1. Greetings Mr Pettinger, you run a very interesting website.
    My question is as follows:
    Energy cost has risen steeply.
    Governments are offering money to their people, to help them bear the increased energy cost.
    Why, instead, don’t Governments impose an upper limit to the asking price of energy producers?
    Because, otherwise the producers will continue to sell energy at high prices, and the Governments’ economic help to households will make the producers rich.

    Thank you!


  2. Hi Tejvan, thanks for the recent articles after the mini budget. One thing that is not getting much air time is what is the impact of the bond market volatility on the BofE’s QE programme. The QE programme seems to be up at £895bln – ie. the BofE has bought that sum in UK and some corp bonds. Over half of that was bought after Brexit and through covid when yields were lower (and therefore prices higher) than today. The BofE must be now sitting on a massive paper loss. What happens now if we move into a sustained higher interest rate environment? How does the Bank ever unwind its bond purchases? What happens to the loss it has made? Grateful for your thoughts, Tim

    • Good question, not entirely sure yet. Especially with bank announcing more bond buying today. They say they will return to selling these QE bonds when markets have ‘calmed’

  3. In Italy the demand for fresh pasta is expected to increase by 5% as income increases by 2% in the USA demand for fresh pasted is expected to increase by 1% as incomes increase by 3% . Use YED calculations to compare and comment on findings

    Please HELP how do I answer this

  4. Hello. Thank you for your excellent helpful website and offer to answer questions. I’d like a straightforward, factual answer as to – Why do we need economic growth? (UK) also, What is better for the nation’s general public; economic growth, or economic stability? (UK) – I’d so appreciate your opinions on these as I’ve been searching and cannot find a balanced, non-partisan reply without agenda. I just want the facts simply explained as you do here. Thank you. These questions fascinate me as from life experience as an ordinary person it seems to me that the continual obsession of growth, growth, growth, only makes the public increasingly poor – so surely economic stability is the better way as this would naturally cause growth to develop organically from a stable base? Please could you reply. Thank you.

  5. Hi tejvan,

    Interest rates are rising and economic commentators are concerned about the impact on borrowers. But isn’t the loss suffered by borrowers offset by the gain by savers?

  6. Hi,
    It seems that Douglas’ Social Credit schema could have successful applications today, especially with a better understanding of Henderson’s Layer Cake as a way to introdcue people to become more interested in the influence of Monetised upper layer on government policy and the waves of recession and growth. (monopoly of credit)
    His application of the National Dividend as an adjunct to his financing of production through a National Credit Office would seem to work well in community economic endeavours, including community banks.

  7. Hi
    I just want to ask, does increasing returns to scale lead to economies of scale (and if this is correct then does increasing returns to scale ALWAYS lead to economies of scale?) or do these happen simultaneously?

  8. Hi Tejvan

    I am trying to understand the usefulness of the idea of opportunity cost. When I make a decision, I do consider all of my options and pick the one that I think is best for me. I don’t think much about the second best option and I don’t feel like I lost out because I chose the best option. If I change my mind about buying that type of good, I may not buy anything or just buy more of something that I knew that I wanted more of previously. Businesses should also be able to keep track of that sort of thing.

    In the theory of comparative advantage theory, opportunity cost is used to determine when a country should trade a particular good. Would it not be easier to just determine which country produces the good more cheaply?


  9. please explain me the better and easy to understanding examples of perfect competition in real world.

  10. I am not an economics student; just a layperson who wants to understand the difference between the way that the governments of two countries like the US and China run the economy and which do you think is more successful.

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