This is a review of economics and its relationships with other social sciences and subjects, such as philosophy, politics, maths, physics, anthropology, psychology and sociology. Also, to what extent does economics benefit from expanding into other subjects? What is economics? Economics a social science that studies the production, consumption and distribution of goods and services. …
Crowding in occurs when higher government spending leads to an increase in private sector investment. The crowding in effects occurs because higher government spending leads to an increase in economic growth and therefore encourages firms to invest because there are now more profitable investment opportunities. Difference between crowding out and crowding in When the government …
Supply and demand illustrate the working of a market and the interaction between suppliers and consumers. Supply and demand curves determine the price and quantity of goods and services. Any changes in supply and demand will have an effect on the equilibrium price and quantity of the good sold. It will also affect the incentives …
SWOT analysis is looking at a businesses – strengths, weaknesses, opportunities, threats. SWOT analysis is useful for a business looking at strategic planning for the future. How can the firm survive, grow and remain relevant. Examples of strengths Current profitable orders. Existing brand loyalty and brand recognition Loyal customer base Mailing list and details of …
Some economists, such as Arthur Laffer, argue that there are circumstances when cutting tax leads to either increased tax revenue or tax revenues stay the same. The logic is related to the incentive effects of tax cuts on productivity and growth. If income tax rates are too high, then workers may be discouraged to work. …
A tax is a charge levied by a government to raise revenue. The main types of taxes include Income tax – a percentage of income. Corporation tax – a percentage of a firm’s profit. Sales tax/VAT – an indirect tax on the sale of goods. Excise duties – taxes on alcohol, tobacco, petrol. Production taxes …
The balance of payments is the record of a country’s transactions / trade with the rest of the world. The balance of payments consists of: Current Account (trade in goods, services + investment incomes + transfers) Capital Account / Financial Account (capital and financial flows, net investment, portfolio investment) Errors and omissions. It is hard …
Definition of a liquidity trap: When monetary policy becomes ineffective because, despite zero/very low-interest rates, people want to hold cash rather than spend or buy illiquid assets. A liquidity trap is characterised by Very low-interest rates Low inflation Slow/negative economic growth Preference for saving rather than spending and investment Monetary policy becomes ineffective in boosting …