Food prices are typically fairly stable in a recession. If the recession is very deep and it leads to a period of deflation (fall in the general price level) then food prices may fall by a similar amount. US Deflation 1929-33 For example, in the great depression (1929-33), we saw a prolonged fall in prices. …
Furlough schemes involve the government paying the wages of workers who would otherwise have been laid off. In the UK, the government pay 80% of wages up to £2,500 a month. Over 7.5 million jobs are now covered by the scheme. It is costing £8bn a month and has helped avoid a surge in unemployment. …
Sometimes governments may wish to reduce the value of their currency. A depreciation in the value of a currency would make exports cheaper, imports more expensive and can provide a boost to domestic demand. If the economy is stuck in recession or unemployment rising, reducing the value of a currency can help increase economic growth …
Both socialism and communism place great value on creating a more equal society and removal of class privilege. The main difference is that socialism is compatible with democracy and liberty, whereas Communism involves creating an ‘equal society’ through an authoritarian state, which denies basic liberties. Democratic socialism in the west involves participating in democracy to …
There is no absolutely agreed definition to a depression. But I would define a depression as A deep and long-lasting period of negative economic growth, with output falling for at least 12 months and GDP falling by over 10%. A depression means the economy experiences a significant fall in output, higher unemployment and disruption to …
The Coronavirus has already led to disruption in manufacturing output, foreign travel and consumer demand. If the virus spreads and becomes a pandemic, what will be the likely economic effects? In short, a global pandemic will have a serious supply-side impact – especially on foreign travel, manufacturing and investment. The uncertainty and decline in travel …
Definition: Underemployment is defined as a situation where people are working fewer hours than they wish; e.g. you would like to work 40 hours a week, but the firm only gives you 30 hours. Underemployment may also refer to the fact workers accept jobs that don’t utilise their skills. e.g. graduate working in McDonald’s may …
There are a few different reasons firms may put up prices, but in each case, a business will weigh up the pros and cons. Potential reasons for increasing prices An increase in costs of production. A general increase in the price level (inflation) Competitors are increasing the price. Firms believe demand has become more price …