The Covid virus has created circumstances where many economic rules, teachings and assumptions don’t apply in the same way. GDP is no longer everything. In economics, GDP is usually the most visible goal, with economic policy often focused around maximising economic growth. The virus forces us to shift priorities – rather than worrying about GDP, …
A list of different types of economic policies. Monetary policy Fiscal policy Supply-side policies Microeconomic policies – tax, subsidies, price controls, housing market, regulation of monopolies Labour market policies Tariff/trade policies Demand-side policies Policies for influencing aggregate demand and expenditure in the economy. This mainly involves fiscal and monetary policy. Fiscal policy Government changes to …
Countries with the highest government spending as a share of GDP. The countries with the highest levels of government spending as % of GDP are predominantly Western Europe and Scandinavia in particular. The countries with the lowest government spending as a % of GDP tend to be poor developing economies. The one notable exception is …
Readers Question: What is the importance of economics? Economics is concerned with the optimal distribution of resources in society. The subject involves Understanding what happens in markets and the macroeconomy. Examining statistics about the state of the economy and explaining their significance Understanding different policy options and evaluating their likely outcomes. Examples of the importance …
Organic food is a big growth area for consumer demand. Once thought to be the preserve of the wealthy or eco-eccentrics, organic food is going mainstream with many people from across the spectrum wishing to purchase organic food. Organic farming avoids the use of artificial fertilisers and pesticides but relies on more traditional methods of …
Microeconomic topics Consumer and producer surplus Demand Substitute goods Complements Economies of scale Elasticity Price elasticity of demand Cross elasticity of demand Income elasticity of demand Price elasticity of supply Market equilibrium Production possibility frontiers Positive and normative statements Opportunity cost Specialisation and division of labour Market failure Positive externalities – the benefit to a …
Definition of Market Failure – This occurs when there is an inefficient allocation of resources in a free market. Market failure can occur due to a variety of reasons, such as monopoly (higher prices and less output), negative externalities (over-consumed and costs to third party) and public goods (usually not provided in a free market) …
Economic development implies an improvement in economic welfare through higher real GDP, but also through an improvement in other economic indicators, such as improved literacy, better infrastructure, reduced poverty and improved healthcare standards. Policies for economic development could involve: Improved macroeconomic conditions (create stable economic climate of low inflation and positive economic growth) Free market …