Economic Questions V

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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.

I will post the answer on this blog, for everyone to benefit from. I never email individual answers

Please Bear In Mind

  1. Use google custom search (top right) to see if question has been asked. If I have already answered a question I don’t tend to repeat it.
  2. The replies will be guidance and not for duplication. Your essays should be your own work.
  3. Don’t ask me to do your coursework / assignment e.t.c. The answer will be published here where your teacher can see it.
  4. My speciality is economics for British A Level standard.
  5. I don’t answer university questions or maths calculations
  6. I am looking to explain economic principles / ideas/ recent developments in economics.
  7. I will answer as a new post. Check home page of blog for new post. With question and answers

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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467 thoughts on “Economic Questions V”

  2. hi….can you please help me for this:
    What will happen in a market system if a good becomes popular and there is a fall in cost of production

  3. Can you please explain and distinguish the terms
    ‘diminishing returns’ and economies of scale’

    And to what extent do economies of scale influence the size of a firm?

  6. Hi can someone please please explain to me how to do this….I cant figure it out at all

    Q:the equilibrium national income is €100,000. the government estimates that full employment would be achieved ata level of income of €110,000. the mpc=.8, the mpm=.3

    a)how much of government spending would be needed to achieve full employment?
    b)diagram
    c)what other options might be open to the government

    please help me im pulling my hair out!! thanks!

  7. My question may sound elementary but is somewhat unusual ; when someone gambles on the FOREX and makes some significant profit buying and selling currencies ; where does his profit comes from ; is it just from the wins and loss of other FOREX investors or does it also indirectly cause some measurable impact on the economy of the nations of these currencies ?…

  8. “Suppose that the money supply is $3.2 trillion. Decision makers at the Federal Reserve decide that they wish to use open market operation to increase the money supply by $500 billion.If the required resersve ration is 0.1, what does the Fed need to do to carry out the planned increase?” This is one exercise in Economics book. I dont know whether I solved it right or wrong because I get a strange result, new required reserve ration is negative. So pls help me! Tks

  10. examine the effectiveness of using the bank rates as an instrument of monetory policy

  11. examine the effectiveness of using the bank rate as an instrument of monetory policy

  12. Hi,

    Was just wondering about the closed capital account in china. What does this mean? How is it related to the build up in $/€ reserves? and what would be the impact of opening this account in the future?

    Thank you!

  13. hi there,
    i’m reading about the uk in the post-war year. perhaps you could explain what caused the ‘run on the pound’? until the early 70’s the exchange rate was fixed. all i can get is that there was pressure on sterling which might have (and did on several occasions) resultd in devaluation. however, i cant work out what exactly what this ‘pressure’ was given that the exchange was fixed?

    hope you can help!
    gav

  14. Interest Rates are increased by the governments to bring down inflation rates, this makes exports price competitive aswell, as a result exports increase. However, an increase in interest rates can lead to an appreciation of the currency as demand for the currency increases. So this again increases the price of exports as the value of the currency increases. So i want to know whether an increase in interest rates improves the current account or worsens the current account.

  15. Hi,

    My question is as follows:

    Can you please explain what is meant by the phrase “for the economy to be in equilibrium, the injections into the circular flow of income must equal withdrawals”?

    Thank you,

    Seline

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