During the 1990s and early 2000s, Spain enjoyed rapid economic growth and became the 5th largest EU economy. In particular, the rapid economic growth encouraged a boom in property. In 2006, Spain started building 800,000 new homes – more than Germany, Italy, France and UK combined. (Euro Challenge.org) However, in 2008, Spain was badly affected …
Readers Question: What are the major determinants of price elasticity of demand? Elasticity of demand measures the responsiveness of demand to a change in price. Inelastic demand means a change in price causes a smaller % change in demand. It means people are unresponsive to changes in price. Inelastic demand will have some or all …
Readers Question: I was really hoping you might be able to inform me of the effects that zero inflation (which the UK is currently experiencing) might have on aggregate demand in the economy? Firstly, this post will help consider the impact of zero inflation on AD and economic growth – Is zero inflation a good …
Firstly, I thought it might be helpful to talk about the different types of spending cuts that people refer to. An actual cut in government spending. e.g. one year we spend £39bn on defence, the next year that is cut to £38 bn. This is a nominal cut of £1bn. The real cut will be …
Readers Question: How do bond spreads affect the value of the Dollar or Euro? A bond yield refers to the interest payment that you receive from holding the bond yield. If the yield is 4%, you can expect £4 a year from a £100 bond. A bond spread refers to the differences in bond yields. …
Readers Question: how we can reduce the unemployment (with implication ) in short run and long run and try to give some lively examples except of uk The unemployment rate in the UK is currently quite low about 4.5%. Therefore, it is difficult for the government to significantly reduce this. A lot of the unemployment …
I’m a big fan of Waterstones. It’s a good bookshop. It’s not Amazon; it even pays UK taxes. I like the atmosphere of bookshops and would be sad if they disappear from the High Street to be replaced by drones delivering books from anonymous warehouses somewhere off the M4. Even though Amazon is often cheaper, …
Readers Question: How does a current account surplus change demand in an economy? A current account surplus means that the value of exports is greater than the value of imports (of goods and services). Net exports is a component of Aggregate demand. (AD) = C+I+G+(X-M). Therefore a current account surplus means that the net exports …