A few people have asked why don’t government’s just default and not pay their debt back? Firstly, a government could effectively default just by printing money, creating inflation and making it easier to pay debt back. But, if the government does create inflation (print money) to pay off its debt or simply refuses to pay, …
Recently, for the first time, Amazon sold as many books as Waterstones. Amazon has been operating for the past 13 years and has succeeded in becoming the countries biggest seller of books. The Managing Director of Waterstones has responded with vigour arguing that Waterstones offers much more than their online rival. He says that those …
Interest rates swaps are a way for financial bodies to exchange risk on the movement of interest rates. They were originally designed as a way for firms to avoid exchange rate controls because interest rate swaps can be done in different currencies. Interest rate swaps are one of the most common type of derivatives and …
The arguments for and against the legalization of cannabis and the taxation of the good by the government. Legalising cannabis and placing a tax on the good has several advantages Advantages of legalising cannabis 1. The Government can raise revenue from the tax. Because demand is likely to be inelastic, the tax revenue could be …
Readers Question: What would be the impact of a recession in China on UK and global economy? China’s economy continues to break records with its break neck records. Depending which measure you use, China is likely to be the world’s biggest economy very soon. Yet, there is no guarantee that this impressive growth will always …
“Maintaining and expanding a nation’s stock of capital requires saving.” Evaluate and explain. Is the assumption of full employment of any relevance? Capital Stock is the level of productive capacity in the economy. Saving and Investment There is an important economic idea that Savings = Investment. The logic is that without bank deposits, banks are …
Readers Question: What is the Economic significance of the construction industry to the UK economy, how it impacts, with respect to trend in economy. According to BIS The UK construction industry contributed 9.2% of the nations GVA (Gross Value Added) in 2007. The UK construction industry consists of over 250 000 firms employing 2.1 million …
Readers Question: Discuss the case for and against relying on the market mechanism to produce clean alternatives sources of energy that can replace fossil fuels such as oil and coal. (15) Fossil fuels are non-renewable resources. Therefore, as they run out, the price will rise. This will create an incentive for firms to look for …