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Costs and Benefit of Tescos

Readers Question Is tesco’s power a net benefit or a cost to the wider economy? In the UK, Tesco have over 32% of market share for supermarkets. It is a similar situation as the US, where supermarkets are dominated by Walmart. Tesco is now the largest private sector employer in Europe. (working for Tesco) It is an emotive issues whether Tesco is Good or bad for society and consumers. Benefits of Tesco 1. Economies of Scale. The large size of the firm means that it can benefit from economies of scale in areas…

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Graphs and Statistics for Chinese Economy

 Please can you tell me the sites where i can find graphs about the chinese economy. for example, graph about the level of employment, export sector, import sector GDP and so on.There is a pdf here on the Chinese Economy, it contains many diagrams and graphs, especially on regional inequality. Pdf link to Chinese economy More graphs on Chinese economy Recent history pdfBrief overview of Chinese economic history here (note no graphs) China Economy at BBCRecent Blog Posts on China Should We worry about a strong China?Chinese…

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Cost Utility and Cost Effectiveness Analysis

Cost Effectiveness analysis looks at economic decision making to weigh up the costs and effects of a particular economic action. It is a way to measure the costs and the benefits from a decision. In a way it is similar to cost benefit analysis. However, cost effectiveness analysis doesn’t necessarily have to categorize all the benefits into a  monetary value. (Although it should be a single measure) For example, this may look at various methods of reducing pollution. It would compare the costs and see how much pollution can…

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Why are there so many different Interest Rates?

I’ve been studying economics for 13 years and I still get confused at the bewildering array of interest rates. Basically, interest rates can range from anywhere between 0% and 2,316% The most important rate is the base rate (sometimes referred to as the repo rate). This is the rate set by the Bank of England. (In US by the Federal Reserve). This is important because it determines the rate at which banks borrow money from the Bank of England. Therefore, if the Bank of England changes the base rate the…

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Indian Economy 2008

Indian Economy 2009 Behind China, India is the second fastest growing economy. According to a survey by Goldman Sachs, India will become the 3rd largest economy by 2035. This is measured in $US. If we use PPP (purchasing power parity) which takes into account local purchasing power, India already has the 3rd largest economy. However, despite having a GDP of US $1.09 trillion (2007). This works out as an average GDP per capita of $964 ($4,182 at PPP – cost of living is relatively cheaper in India) Growth in 2007 is…

Problem of Cost Push Inflation and Unemployment

Problem of Cost Push Inflation and Unemployment

Readers Question: how to resolve unemployment associated with inflation? Often, there is a trade off between unemployment and inflation. In an economic downturn unemployment rises, but inflation falls. This type of unemployment is known as cyclical unemployment. The unemployment associated with inflation would be a result of cost push inflation factors. In the diagram below we see inflation and a fall in GDP. Therefore, this leads to rising unemployment and rising inflation. This is an experience known as stagflation. Diagram Showing Inflation and Unemployment

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The Economic Value of Diamonds

Readers Question: Why are Diamonds very expensive and water very cheap, when diamonds are useless, but water is essential for life? The first question is – how many diamonds do you buy during your lifetime? How often do you consume water? The average person will buy maybe 2 or 3 diamonds. 1 as a wedding ring, 1 for a 25 year wedding anniversary. There is a high marginal benefit (utility) of buying your wife a diamond for her wedding. True love is priceless, but, diamonds don’t do any harm to a…

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£10 History of Money

What happens if I take a £10 to the Bank of England? If you look at a British £10 note, it says “I promise to pay the bearer on demand the sum of ten pounds” Therefore, if the Bank of England is true to its word, you should be able to go to Threadneedle street and demand the value of ten pounds in Gold. Of course, a ten pound note, has no intrinsic value. It is used to merely act as a medium of exchange. There was a time when the…