GDP measures gross domestic product. It is a measure of a nations economic output/income/expenditure. GDP is an excellent guide to the total number of marketable goods and services produced and consumed in an economy. It is a useful economic statistic – especially for managing the economic cycle, but has often become a short-hand for economic …
Readers Question: Where does the UK government get its money from? UK tax revenues come from a variety of sources. The main sources of tax revenue include: Income tax (main tax rate is 20%) National Insurance (NI) – a form of income tax VAT (20% on most goods and services) Corporation tax Council Tax (local …
The Dutch disease refers to the problems associated with a rapid increase in the production of raw materials (like oil and gas) causing a decline in other sectors of the economy. When the raw materials run out, the economy can be in a worse position than before. – Can the discovery of substantial raw materials …
Consumption is the purchase of goods and services for the acquisition of current utility. Investment is expenditure on capital goods for the acquisition of future utility. Investment increases the capital stock. Examples of the difference between consumption and investment A householder buys a car so that they can travel around to work and leisure activities. …
By different measures, US corporate profit has increased significantly in the past two decades. It stands at 10.5% of GDP. What is behind the large rises in profit? Source St Louis Fed CP (not this is for nominal profit) In 2021, US corporate profit after tax stands at 2,700 billion (or $2.7 trillion) This is …
Labour shortages occur when employers struggle to fill labour vacancies because of insufficient labour applying for the jobs. Labour shortages can occur in geographical regions or in occupations with special requirements in terms of skill or function. Labour shortages can also be seasonal in industries like retail (Christmas) and agriculture (harvest time). Recently, since Brexit …
There are many costs associated with inflation; the volatility and uncertainty can lead to lower levels of investment and lower economic growth. For individuals, inflation can lead to a fall in the value of their savings and redistribute income in society from savers to lenders and those with assets. At extreme levels, inflation can destabilise …
Readers Question: Is education a consumption good or investment good? And why I would say education can be both a consumption good and an investment good. Consumption is defined as spending money on a good or service for the acquisition of utility. Investment is defined as spending money on a good or service for the …