What are the advantages and disadvantages for a developing economy, such as Ghana if it is dependent on primary products? Definition of Primary products: Raw materials and resources used in the productive process. Examples include metals, agricultural products and minerals. Advantages of Producing Primary Products For many developing economies, their main comparative advantage will be …
The Indian Rupee has fallen in value against a basket of currencies since independence in 1947. In recent years, the Indian Rupee has continued to depreciate in value. Indian Rupee value against US Dollar In 1990, you could buy $1 for 16 Indian Rupees. By 2013, the value of a Rupee had fallen, so that …
Readers question: What is a ‘dual economy’? A dual economy refers to the existence of two distinct types of economic segments within an economy. This involves: A capitalist based manufacturing sector (geared towards global markets) Labour intensive agricultural sector (low productivity, geared towards subsistence farming or local markets) The British economist W. Arthur Lewis wrote …
Primary products are goods that are available from cultivating raw materials without a manufacturing process. Significant primary product industries include agriculture, fishing, mining, and forestry. Examples of Primary products oil water fish fruit crops wood Often developing countries have a comparative advantage in producing primary products. This is because many developing countries (e.g. in Africa …
In recent months, we have seen a dramatic drop in oil prices. For many consumers and business, this fall in the price of oil will be welcome reduction in the cost of living and a reduction in the cost of business. However, is such a steep fall in oil prices good for the economy? Benefits of …
Laissez-faire economics is defined as a situation with minimal government intervention. Under laissez-faire, governments and regulators ‘leave alone’ private firms to allow them to make decisions about production and output. In particular, laissez-faire involves zero / minimal government intervention on issues such as regulation, taxes and tariffs. Comparison between Laissez-Faire economics and social democracy Origin …
Liquidity refers to the ease at which assets can be converted into cash. An asset is said to be liquid if it is easy to buy and sell; for example, short-date government gilts are a highly liquid market because it is easy to sell on the bond markets. As asset is said to be illiquid …
All economic forecasts are subject to margins of error. This is because: There are many variables affecting the economy. For example, the role of shadow banking was largely ignored in 2007 forecasts but failed sub-prime mortgage debt had a much bigger impact on the wider economy than ever before. There is always a big element …