Most western economies are facing the prospect of record peace time government debt levels. The EU Maastrict Criteria stated that the maximum budget deficit member countries could run is a budget deficit of 3% of GDP. (By the way, I am glad this target for government borrowing has not been enforced. That would have been …
Readers Question: i am 16 and i have been working in Mcdonalds in my local area for about a year now do you think I should ask for higher wages? Danielle (from Min Wage 16-17 year) Well according to another commentator, Christopher, he is 17 and earns £4.35 an hour and ‘if i work well …
Readers Question: Are books inferior goods or normal goods? An inferior good is a good where a rise in income leads to lower demand. It is a good with a negative income elasticity of demand. “When I get a little money, I buy books. And if there is any left over, I buy food.” Desiderius …
Readers Question: Is it possible the phenomenon to have a relationship between GDP and house prices where an increase of the mean GDP to lead to decreased house prices? Yes, An interesting phenomena is that UK house prices have shown an increase during 2009 – despite a prolonged recession. Typically, in a recession, you would …
Readers Comment: I believe if you want to solve the recession then look at footballers. they earn millions and for what/kicking a ball around!! I think their wages should be cut down to say 75k a year and the remaining money should be used wisely. This recession illustrates that economic policy often involves making decisions …
Readers Question: What effect does expansionary fiscal policy have on the fishing sector? If successful, expansionary fiscal policy will increase Aggregate demand and increase the rate of economic growth. In a recession, expansionary fiscal policy could play a significant role in increasing level of living standards and levels of consumption. Expansionary fiscal policy involves changes …
Champagne is a very good example of a luxury good. (a change in income causes a bigger % change in demand) Furthermore, supply of Champagne is limited to certain regions of France. With this monopoly power over supply, French wine producers have been able to set very high prices. Champagne can easily go for over …
The River Cam in Cambridge. Recently, we looked at why water can be more expensive than beer, even though water doesn’t attract excise duty Water is the most important commodity in the world, it is indispensable for life, yet, it is also one of the cheapest. In many circumstances we can say water is a …