Joining the Euro is supposed to be an irreversible decision. But, individual countries could always pass individual acts of parliament to leave the Euro. However, leaving aside all the political issues, there are many economic stumbling blocks. One problem is that countries generally would only consider leaving when there was a real economic crisis – …
Summary Education has positive benefits for the rest of society. If university education is left to market forces, there may be under-provision, and the economy may suffer from a lack of skilled graduates. Furthermore, in a free market, higher education would become the preserve of wealthy families who can afford to send their children to …
Unemployment is defined as a situation where someone of working age is not able to get a job but would like to be in full-time employment. Note: If a mother left work to bring up a child or if someone went into higher education, they are not working but would not be classed as unemployed …
Trading blocks are groups of countries who form trade agreements between themselves. Trading blocks can include Free trade areas – elimination of tariffs between economies in the trading block Customs union – free trade area + a common external tariff with non-members Economic union/Single market – Customs union + common rules and regulations. Different types …
Readers Question: what does AD stand for in economic terms? AD = Aggregate Demand – the total planned expenditure in an economy. Aggregate Demand is composed of various factors C, I, G, X – M C= Consumer spending I = Investment (Gross Fixed Capital Formation) G= Government Spending X= Exports M= Imports AD places a …
Definition: Money is an object used as a medium of exchange between two parties. It can have intrinsic value like gold or it can be a universally accepted instrument such as notes and coins printed by a Central Bank. Early money These gold coins are an example of money with an intrinsic value. Made out …
Financialisation is a term used to describe the increased role of the financial sector in a modern economy. Source: NYT 2013 Financialisation also refers to particular trends in the financial sector of the economy. This includes: Increased use of financial intermediaries Increased use of futures markets. For example future contracts for bonds, shares, currencies and …
Readers Question What does the size of a current account deficit / surplus say about the state of the economy? A current account deficit means that the value of goods and services imported is greater than the value of exports. A current account deficit requires capital / financial flows to finance this deficit. Despite the …