You are welcome to ask questions on Economics. I am looking to explain economic principles / ideas/ recent developments in economics. Due to the volume of questions, I can no longer promise to answer. But, I will try if it meets below criteria.
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I studied PPE at Lady Margaret Hall college, Oxford University, and currently work as an Economics A Level teacher. I have also examined several different economic units for Edexcel AS and A2.
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Hi John
GDP means Gross Domestic Product and GPI means Genuine Progress Indicator. GDP calculates only economic growth but GPI watches economic growth with welfare.
Actually GDP is more used in reality than GPI.
Growth in GPI = Economic Growth-Cost of Economic growth(like pollution , resource depletion due to growth etc)
Actually GPI is more theoretical and not used in practical.
On the other hand GDP is one of most practical measurement of economic growth.
GPI can never become an alternative to GDP. Yes GDP just watches economic growth and there are many other important things as we are human beings like our health, environment. So we should also need to improve our social and envoi mental growth.
Thanks,
Raj
Help please. A product has an elasticity of 3.43. If the firm raises the price, what do you expect to happen to quantity demanded? Answer – the demand goes down. What would happen if the elasticity was 0.5???
Help please
Hi Arthur
Advertising elasticity of demand simply measures change in demand in result of change in advertisement Expenditure. Yes in some cases it may underestimate or overestimate change in demand. For example, in 1980 a citrate brand is being sold. Company spent one thousand dollar on advertisement. Next year company spent 1500 dollar on advertisement. But its sale does not increase . In case of Advertising elasticity of demand, it would show not much effect of increasing expenditure on Advertisement. Actually, It may possible if advertising expenditure were not increased, its sales could declined. So benefit of advertisements are underestimated here.
In simple words, there may be many factors effecting demand, AED ignores them and some time it does not show real effect.
Hi Matthew
This recession was more related to banking and financial parts of economy than whole economy. Weak regulations of financial institutions and overvaluation of property were major cause of recession. Economy was growing very well for many years before 2007. When capacity of growth came to end, It started going little back. An economy can not grow at long run continuously, there is a capacity factor. It has to settle at capacity factor.
In short run , sometime it grow more or less than capacity factor. Then it try to come at its capacity level. Commodity prices reached at top. This made demand side very weak. This damaged the coordination of economy. Yes if Fed had played a good role, recession would be much smaller.
What is the difference between GDP and GPI? Is their a case for scrapping GDP and use GPI as the way to calculate growth?
Fanks very much!!!