Tejvan Pettinger - Economics Help

The impact on Czech economy of a decline in the car industry

6 May 201613 June 2008 by Tejvan Pettinger

Readers Question: Discuss the Impact on Czech Economy of a decline in the Car Industry.

The car industry plays an important role in GDP of Czech (16% of economy is Car industry) (19% of export revenue) and jobs. BTW: Skoda is the main car.

A decline in the car industry would lead to lower exports and lower aggregate demand. This would lead to lower rates of economic growth and a rise in unemployment. It may also adversely affect related industries such as suppliers to the car industry. Therefore, there could be a negative multiplier effect.

It would also cause a deterioration in the current account balance of payments. Cars give 19% of export revenue so it would be relatively significant and could cause a depreciation in the exchange rate.

Car Prices in UK and Europe

12 June 2008 by Tejvan Pettinger

A report by the European Union EU, found that on average UK car prices were 10% higher than in EU. In some cases, the difference in price could be much greater. Some people have taken advantage of this price difference to buy a new car on the continent. [BBC report]

OCR exam question: Discuss factors that might explain differences in Car Prices across Europe

1. Purchasing power of Pound. Quite a few goods tend to be more expensive in the UK than the continent.

2. Different Living Costs. Exchange rates don’t always reflect local purchasing power of currencies. For example, in Poland living costs are relatively low, reflecting lower wages and lower cost of renting. Garages in UK, have to charge higher prices to cover the cost of renting in the UK.

Should We Place Windfall Tax on The Banking Sector?

16 January 20209 June 2008 by Tejvan Pettinger

(b) Discuss whether high profits and the dominant market share in the banking sector suggests that there should be more government intervention – either through windfall taxes or regulation of prices. (30) British banks are highly profitable. They made a combined profit of £42 bn in 2007. Despite effects of credit crunch, banks have seen …

What is the impact of an increase in UK Tax Burden?

1 February 20208 June 2008 by Tejvan Pettinger

Readers Question: Tax changes in recent years have brought a significant increase in tax burden in the UK expressed as a percentage of GDP. Can you please assess the possible impact of such an increase? An increase in the burden of tax from say 35% of GDP to 38% of GDP could have the following …

Link Between International Competitiveness and Inflation

1 February 20208 June 2008 by Tejvan Pettinger

Readers Question: If British industry was to become uncompetitive it would have the following adverse effects on the economy: one of them is a higher level of inflation. How to explain that? If British industry becomes uncompetitive it means that basically, the UK’s cost of production is rising faster than our international competitors. For example, …

Exam Technique – Do I Have to Tell the Truth?

8 June 2008 by Tejvan Pettinger

Readers Question: I just apply the theory and I am not sure whether I have to tell the truth in the economics exams ? It is good to tell the truth, you can’t make things up. Especially when it comes to economic theory. However, often you might get asked questions where the answer is uncertain. …

Is China Communist?

16 January 20208 June 2008 by Tejvan Pettinger

Reader’s Question: for many years American referred to people’s republic of china as communist. Why would that label be misleading today? China is still contolled by the Chinese Communist Party, so we could say that politically China is Communist. However, economically, China is no longer being run by Communist economic ideology. Important ideas of Communist …