For the past 40 years, China has been one of the strongest performing economies – transforming itself from a developing economy to an unprecedented level of prosperity. However, in recent years, there have been concerns the rapid rate of growth in China is beginning to slow down and over the next few years, economic challenges …
A look at some arguments for and against public/private healthcare provision. Should healthcare be left to the free market or should the government provide universal healthcare? Arguments for Public Health Care Healthcare is not a profit maximising industry. Doctors and nurses don’t need financial incentives to do a good job but are motivated by aims …
Perfect competition is a market structure with: Freedom of entry and exit Perfect information/knowledge Many firms The price is set by the industry supply and demand. Firms are price takers; this means their demand curve is perfectly elastic. If they set a higher price, nobody would buy because of perfect knowledge. Therefore firms have an …
Readers Question I would like to know the full explanation of Expansionary Discretionary fiscal policy and its effects on the economy. Fiscal Policy is changing the governments budget to influence aggregate demand. i.e. changing taxes and spending. Discretionary fiscal policy means the government make changes to tax rates and or levels of government spending. For …
Readers Question What does the size of a current account deficit / surplus say about the state of the economy? A current account deficit means that the value of goods and services imported is greater than the value of exports. A current account deficit requires capital / financial flows to finance this deficit. Despite the …
In economics producers – often referred to as firms or companies play a role in using inputs (different factors of production) and producing goods and services (output). Firms play a key role in deciding what to produce and how to produce. Different types of firms Individual entrepreneurs – self-employed individuals Private companies – often small/mid-sized …
Competition is an essential element of market economies. Different firms have the freedom to attract customers based on price, quality, service and convenient. The type of competition will depend on the product and market structure. For example, in a market with many traders selling potatoes, price will be a key factor. Consumers will shop around …
Tax incidence refers to how the burden of a tax is distributed between firms and consumers (or between employer and employee). The tax incidence depends upon the relative elasticity of demand and supply. The consumer burden of a tax increase reflects the amount by which the market price rises. The producer burden is the decline …