House prices fall where there is a decline in demand and/or excess supply. The main factors that cause a fall in house prices involve: Rising interest rates (making mortgage payments more expensive) Economic recession / high unemployment (reducing demand and causing home repossessions). Fall in bank lending and fall in availability of mortgages (making it …
Smoking causes an increased risk of cancer to both those who smoke and also to third party’s who breathe in other people’s smoke. It is a classic example of a demerit good. To reduce smoking rates, the government can choose policies from Higher tax Raising legal minimum age Restrictions on smoking in public places Subsidies …
Readers Question: What are the main problems of the current UK economic situation? Low economic growth and in particular stagnant real wage growth Poor productivity growth since 2008 – which affects long-term growth prospects. Uncertainty from Brexit and likely costs to trade from new custom arrangements. Manufacturing sector State of the housing market – expensive …
Deflation is defined as a fall in the general price level. It is a negative rate of inflation. The problem with deflation is that often it can contribute to lower economic growth. This is because deflation increases the real value of debt – and therefore reducing the spending power of firms and consumers. Also, falling …
Organic food is increasingly popular. In the UK, sales of organic food and drink is worth £1.96bn. But organic food still has only 1.4% share of the food and drink market (Soil Association) – with higher prices discouraging many shoppers. Organic food also attracts a hefty premium over non-organic food. In 2016, in the US, …
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 …
The great recession refers to the economic downturn between 2008 and 2013. The recession began after the 2007/08 global credit crunch and led to a prolonged period of low/negative growth, rising unemployment and a period of fiscal austerity. In particular, the great recession highlighted problems within the Eurozone which experienced a double-dip recession and high …
Since 1978 the Chinese economy has maintained economic growth at an average of nearly 8%. By western standards this is remarkable. The UK, by contrast, has grown at an average rate of 2.5%. However, despite the impressive figures, there are many serious economic problems resulting from economic growth. Chinese GDP In particular, the growth rate …