A look at the economics reasons for high youth unemployment (16-25) in many western economies. In the UK, youth unemployment has averaged higher than the main unemployment rate. This is is a similar situation to the US and European economies. The reasons for youth unemployment include Lack of qualifications. Young people without any skills are …
Resource scarcity is defined as a situation where demand for a natural resource is exceeding the supply – leading to a decline in available resources. When we talk about scarce resources, we usually imply that current use is unsustainable in the long-term. Scarcity can involve non-renewable resources, such as oil, precious metals and helium. It …
What are some of the biggest misconceptions about how the economy works? Some misconceptions Economists can make reliable forecasts. Presidents control the economy – Policies of government only partially responsible for economic activity. Luddite fallacy. – Misconception that new technology destroys jobs. Broken window fallacy – Misconception paying for damage creates economic activity. The lump …
The law of unintended consequences refers to how economic decisions may have effects that are unexpected. Usually, this refers to an economic law which distorts consumer or producer behaviour in a way that is not expected. For example, a law may be implemented with the best intentions to help a group, but, if there are …
The business or trade cycle relates to the volatility of economic growth, and the different periods the economy goes through (e.g. boom and bust). There are many different factors that cause the economic cycle – such as interest rates, confidence, the credit cycle and the multiplier effect. Some economists also point to supply side explanations, …
Evaluation is an important component of an advanced essay. It requires the ability to look at facts, arguments and analysis, with a degree of critical distance. Evaluation involves: Looking at what other factors may affect the outcome. Time lags involved. How it might depend on other issues, e.g. elasticity of demand Why the original statement …
Economic growth means an increase in national income/national output. If we have a slower rate of economic growth – living standards will increase at a slower rate. For example, in the post-war period, western economies grew at 2.5% to 4.% per year. However, since the early 2000s, growth rates have slowed down. This process of …
Different models of economic growth stress alternative causes of economic growth. The principal theories of economic growth include: Mercantilism – Wealth of a nation determined by the accumulation of gold and running trade surplus Classical theory – Adam Smith placed emphasis on the role of increasing returns to scale (economies of scale/specialisation) Neo-classical-theory – Growth …