A product market refers to a place where goods and services are bought and sold A factor market refers to the employment of factors of production, such as labour, capital and land. Product market Demand for product markets comes primarily from households The main sellers of goods are different kinds of firms. Demand for goods …
Economic growth means an increase in real GDP – this leads to higher output and higher average incomes. Governments often try to increase the growth rate because it will have various advantages. These include Benefits of economic growth Increased consumption. Firstly, higher GDP implies the economy is producing more goods and services and therefore consumers …
A look at the different factors affecting the price of oil in both short term and long. Readers Question: I’m trying to update myself on what’s happening with oil prices at the moment (partly to prepare myself for uni interviews) but I’m finding very conflicting articles, such as: Article warning of oil rising to $150 …
The demand curve shows the amount of goods consumers are willing to buy at each market price. A linear demand curve can be plotted using the following equation. Qd = a – b(P) Q = quantity demand a = all factors affecting QD other than price (e.g. income, fashion) b = slope of the demand …
After a decade of secular stagnation in the west and ultra-low interest rates – from an economic perspective, the Turkish economy is ‘interesting’ in the sense that it gives a very different set of economic circumstances. An economic boom with parallels and similarities to the 1997-98 Asian Crisis. Since 2000, the Turkish economy has grown …
Readers Question: What are the advantages and disadvantages of inflation? The Government have an inflation target of CPI 2%. This suggests they would rather have moderate inflation than no inflation at all. Advantages of Inflation Deflation is potentially very damaging to the economy and can lead to lower consumer spending and lower growth. For example, …
The Money Multiplier refers to how an initial deposit can lead to a bigger final increase in the total money supply. For example, if the commercial banks gain deposits of £1 million and this leads to a final money supply of £10 million. The money multiplier is 10. The money multiplier is a key element …
Joint supply occurs when two goods are produced together from the same origin / raw material. Examples of joint supply If you grow wheat, you get both wheat and straw. Producing refined flour creates bran as a byproduct. Bran can be used as fibre ingredient or using in compost If you increase the supply of …