Capital to Labour ratio measures the ratio of capital employed to labour employed. The capital-labour ratio (K/L) can measure the capital intensity of a firm. Typically, over time, firms tend to have a higher capital-labour ratio as they seek to gain productivity improvements from investment in capital and automating the production process. High Capital to Labour Ratio …
Definition of Fiscal Drag Fiscal drag is a concept where inflation and earnings growth may push more taxpayers into higher tax brackets. Therefore fiscal drag has the effect of raising government tax revenue without explicitly raising tax rates. This fiscal drag has the effect of reducing (or limiting increase) in Aggregate Demand and becomes an …
Readers Question: Which is more useful for determining living standards – GDP/capita and GDP/working hour GDP per capita measures national income per population GDP per working hour measures national income / total hours worked in the economy. source: US Bureau of labour statistics GDP per capita would probably be the first measure to look at. …
There are two main classifications of poverty: Absolute poverty – income below certain income necessary for basic living standards Relative poverty – household income 60% below median wages. See: Measuring poverty Absolute poverty was much more of an issue before the introduction of the Welfare State in 1945. Since 1945, rising living standards and a …
What causes price fluctuations for the supplier in an agricultural market such as coffee/tea? Coffee and tea are agricultural products, and therefore supply can be variable depending on several factors behind the control of producers (weather, disease). Furthermore, because demand and supply are inelastic, any change in supply can cause a significant change in price. …
The Bank of England Monetary Policy Committee (MPC) is responsible for setting interest rates and trying to achieve a target rate of inflation. Until 1997, the government set interest rates and monetary policy. But, it was felt that the government might make bad decisions because they would be influenced by short-term political pressures. Therefore, they …
Definition of capital mobility – easy for physical assets and finance to move across geographical boundaries. Capital immobility – when capital faces restrictions on the free movement. What is capital? Capital principally refers to physical capital – durable goods used in the production process – machines, factories. This physical capital is determined by levels of …
When did you get your first mobile phone? I got mine in 1999, which it turns out was the year of most rapid growth in mobile phone use. Mobile phones look to have the classic product life cycle of introduction, growth and maturity. Introduction A long slow period of introduction from 1985 to 1997. I …