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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Hello Jyoti
Govt is a body which has many duties and aims . As you know, to fulfill these duties like any other organization govt also need money.
Govt need money for defence expenditure, for public health programs, for education programs etc
So govt can use only following sources :
a) loans from foreign country or foreign organization
b) loans from inside the country
c) income from govt institutions, govt companies etc
d) Income from different direct and indirect taxes etc
e) by budget deficit
So income tax is very important component of govt ‘s revenue.
Rising income tax decreases net income of tax payers but it may be good for others.
Inferior goods are cheap goods whose demand decrease when income of person increases. For example when people become rich they may decrease eating potato and demand of potato will decrease.
Q.1 dependancy on market economy will ensure both allocative and productive efficiency evaluate this statement with relevent discussion.
Q.2 explain why a government may find that when it is trying to control inflation it cannnot disgregard its other policy aims of full employement economic growth and equilibrium in the balance of payment.
Q.1 explain two reasons why a government imposes tax. In what ways could a rise in income tax effect individuals?
Q.2 with a suitable diagram give the definition of inferior goods and explain the circumstances in which a firm selling an inferior goods is likely to experienc decrease in sales.
( please try to give answer as soon as possible)
Hello Tanu ji
Different goods have different elasticity of demand. It depends on human nature. We have need of different goods at different degree.
Some goods are very necessary and some are less necessary .
So due to variation of our needs for different goods their elasticity is different. For example electricity is very important to all of us .Even its rated goes up , there will not big effect on its demand .
But if anything like gold ornaments goes up you may avoid them and their elasticity of demand would be higher.
Secondly it also depends on substitute of good. Some goods have good substitute and other have less or not. If a good has substitute its elasticity of demand would be higher.
Hi Felix
Term of trade can strongly effect balance of trade. If a country apply strict import policies and encourage export it may strongly increase balance of trade surplus. Yes it may have some other side effect lie due to low competitiveness productivity may decrease etc.
For example If America impose ban on may imported goods its trade deficit would decrease.
Hello Lifa
HIV , POPULATION GROWTH,economic inequalities etc are major problems of South Africa.