A look at factors affecting the demand and supply of housing. In summary. Demand-side factors 1. Affordability. Rising incomes mean that people are able to afford to spend more on housing. During periods of economic growth, demand for houses tends to rise. Also, demand for housing tends to be a luxury good. So a rise …
Some potentially common mistakes in economics. 1. Confusion of rates of change and actual levels What happened to the UK price level between May 2011 and Feb 2015? The answer is that prices rose at a slower rate. There was a fall in the inflation rate. Prices were still rising just at a lower rate. …
Household saving is defined as income that is not consumed. Savings can be kept in cash form, saved in a bank account or saved in long-term assets, such as government bonds. Quick summary of factors that influence saving levels Interest rates – higher interest rates make saving more attractive. Rising income enables higher savings. People …
The fundamental economic problem is the issue of scarcity but unlimited wants. Scarcity implies there is only a limited quantity of resources, e.g. finite fossil fuels. Because of scarcity, there is a constant opportunity cost – if you use resources to consume one good, you cannot consume another. Therefore, an underlying feature of economics is …
Readers question: Explain the main factors which affect population size and growth? Population growth is determined by fertility rates (the number of children per adult) – fatality rates. Birth rates and mortality rates are, in turn, determined by a combination of factors. Often economic growth and economic development have led to a decline in population …
A look at factors that determine bond yields. Firstly, bond yields have an inverse relationship with the price of bonds. If demand for bonds rises (and therefore price of a bond goes up), the yield goes down. A £1,000 bond that has an interest rate of 5% – means the government will pay £50 interest payment …
Economics is a broad subject concerned with the optimal distribution of resources in society. Within the subject, there are several different branches which focus on different aspects. Also, there are different schools of thought which generally have different views on aspects of economics. The first way to split economics is microeconomics and macroeconomics. Microeconomics – …
What is Economic development? Economic development is the process of improving economic welfare in an economy. Economic development can involve a stronger economy enabling a greater range of social services that improve a nation’s welfare. For example, an undeveloped economy will be primarily based on agriculture and very limited social services such as health care …