What are some of the biggest misconceptions about how the economy works? Some misconceptions Economists can make reliable forecasts. Presidents control the economy – Policies of government only partially responsible for economic activity. Luddite fallacy. – Misconception that new technology destroys jobs. Broken window fallacy – Misconception paying for damage creates economic activity. The lump …
A maximum working week is a legal limit on the standard number of hours that can be worked in a week. For example, in 2000 France passed a maximum working week of 35 hours. Additional hours could be worked, but they had to be paid at an overtime rate of +25%. At the 2019 Labour …
Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential. According to the OECD, human capital is defined as: “the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services …
The business or trade cycle relates to the volatility of economic growth, and the different periods the economy goes through (e.g. boom and bust). There are many different factors that cause the economic cycle – such as interest rates, confidence, the credit cycle and the multiplier effect. Some economists also point to supply side explanations, …
Evaluation is an important component of an advanced essay. It requires the ability to look at facts, arguments and analysis, with a degree of critical distance. Evaluation involves: Looking at what other factors may affect the outcome. Time lags involved. How it might depend on other issues, e.g. elasticity of demand Why the original statement …
An explanation of how the rate of interest influences the level of investment in the economy. Typically, higher interest rates reduce investment, because higher rates increase the cost of borrowing and require investment to have a higher rate of return to be profitable. Private investment is an increase in the capital stock such as buying …
Definition: The environmental Kuznets curve suggests that economic development initially leads to a deterioration in the environment, but after a certain level of economic growth, a society begins to improve its relationship with the environment and levels of environmental degradation reduces. From a very simplistic viewpoint, it can suggest that economic growth is good for …
A look at the economic impact of a fall in the exchange rate (termed depreciation or devaluation) A fall in the exchange rate is known as a depreciation in the exchange rate (or devaluation in a fixed exchange rate system). It means the currency is worth less compared to other countries. When there is a …