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 am looking to explain economic principles / ideas/ recent developments in economics.
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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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Hello Johni
You can see what is happening in England.
Bank of England cut interest rates, Increased money supply to fund economic add to financial institutions and industry. Government also
Helped many financial institutions to save them.
Like all world English policy makers also think low interest rate would decrease the alternative cost of money. Funds would be available at low rate and this would encourage investments and will help GDP to grow at better rate. People will spend more and this will create more demand and more employment.
Before recession rates were more than 5% now just half percentage.
One bad effect of this is very high rate of inflation.
Hello Sanghita
In consumption function income changes more than consumption because we do not spend all our marginal income. You earn $5000
Per month , After one year your salary increases to $ 8000. Your marginal income is $3000. Your consumption would be equal to income only if you spend all $3000 you more earn which mostly does not happen. Mpc and mps is not different from above. MPC is rate how much we spend with our marginal income. If you spend $1500 and save $ 1500 from you extra income then your MPC would be .5 and MPS also .5
MPC measures how much consumption increases with increase in income. Yes consumption may equally change with income if MPC is 1 i.e you fully spend your marginal income and save nothing or take loan and spend more than your income.
Hello Barka
Equilibrium unemployment is a situation where aggregate demand and aggregate supply of labor at given wage rate are equal but still there is unemployment in an economy.
Hello Cayau
If an economy is not working efficiently , money supply to idle resources and low interest rate can be used to increase output in an economy. Government should put money in idle resources. Government can give employment in public sector which is not properly present in economy. For example government can create shipping company if shipping industry is not playing a good role and there is capacity for shipping industry. After some years govt can sell company. Govt should decrease tax to export oriented activities as it would create more external demand. Best way to close inefficiency of economy without large deficits is best use of income. Income from taxes should be used as maximum idle resources put on job and maximum demand is created from that amount of money. Demand is key to the output in economy.
Hello Mohammed
Amount of money, velocity of monetary transactions (money circulations ), price of transactions and amount of transactions(means total output) are main four components of quantum theory of money. This theory predicts that these four process in economy make effect on inflation.
M*V=PRICE LEVEL * OUTPUT
price level= (m*v)/output
As amount of money increases inflation increases. The main assumption in this theory is growth in total money and in velocity of money are responsible for inflation. Central banks can increase or decrease money supply.
If velocity of money and amount of monetary transactions do not change then price of transactions (Increasing p is inflation ) would be equal to money growth.
Hi,
I work with various energy monitoring markets that lead a consumer to reduce their consumptions of various energy sources, this awareness and related monitoring products are typically funded by an energy provider.
How does this work, that the provider, to whom you pay for supply, is giving you a product or mechanism to, in effect, reduce that same product you take from them?