Rules of origin refer to finding the source of a product. For example, if the UK import bananas from Spain, where the bananas originally from Spain or were they imported from Costa Rica. If the bananas come originally from Costa Rica, that has importance for: Custom duties Trade statistics on imports and exports For marketing …
The rust belt is an area of mid-west US dominated by declining manufacturing industry. Cities and regions affected tend to have: High unemployment Declining populations Falling real incomes Social problems associated with structural unemployment. Although the rust belt refers mostly to the mid-west of the US, it can refer to any area which experienced a …
Say’s law states that the production of goods creates its own demand. In 1803, John Baptiste Say explained his theory. “It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value.” (J. B. Say, 1803: …
Definition: Seasonal unemployment occurs when people are unemployed at particular times of the year when demand for labour is lower than usual. For example, in a Ski resort unemployment is likely to be higher in the summer when there is no snow. Often unemployment falls around Christmas time because extra jobs are available (e.g. Royal …
Seigniorage is the profit created by issuing currency, where the face value is higher than the intrinsic value. (production costs) Seigniorage income can also relate to the interest a Central Bank charges from lending commercial banks money. Seigniorage explained Early forms of money had a face value equal to the production costs – e.g. gold …
Shadow costs are the estimated value placed on intangible costs in a project. A shadow cost is an estimated price for an outcome that is not normally sold or given accounting value. For example, if a firm is deciding whether to build a new factory, the actual costs of material and labour will be easy …
The aggregate supply curve shows the total supply in an economy at different price levels. Generally, the aggregate supply curve slopes upwards – a higher price level encourages firms to supply more. However, there are different possible slopes for the aggregate supply curve. It could be highly inelastic (vertical) to very elastic. It is important …
The short run, long run and very long run are different time periods in economics. Quick definition Very short run – where all factors of production are fixed. (e.g on one particular day, a firm cannot employ more workers or buy more products to sell) Short run – where one factor of production (e.g. capital) …