Printing money creates a sense of nervousness amongst both economists and the general public. It immediately conjures up memories of hyperinflation in Weimar Germany in 1923 and Zimbabwe in more recent times. If a government prints money faster than the growth of real output it reduces the value of money and this invariably causes inflation. …
Profit maximisation is an assumption of classical economics. One can easily understand the logic of pursuing profit maximisation. Profits enable greater wages and dividends for the entrepreneurs who set up the company. Profit can be used to finance investment in expanding the company Profit provides a fall back for difficult times However, despite the benefits …
Primary products are goods that are available from cultivating raw materials without a manufacturing process. Significant primary product industries include agriculture, fishing, mining, and forestry. Examples of Primary products oil water fish fruit crops wood Often developing countries have a comparative advantage in producing primary products. This is because many developing countries (e.g. in Africa …
A list of the major recessions in UK and US. List of Recessions in UK Comparing different recessions 1919-21 Recession GDP fell 25% during the three years following the end of the First World War. Unemployment rose to 20% UK experienced deflation of 10% in 1921, and 14% in 1922 Causes of fall in GDP …
Cinema admissions in UK 1935-2011 In the 1930s, the cinema was one of the main forms of entertainment in the UK. During the war years, and post-war austerity of the 1940s, cinema-going reached a peak at over 1.64 billion admissions in 1946. After this postwar peak, there was a gradual decline in the 1950s, before …
Monopsony occurs when there is one buyer and many sellers. In the labour market, a monopsony occurs with one employer and many workers wanting to gain employment. Arguably, monopsony power enables firms to ‘exploit’ workers by setting lower wages and employing fewer workers than in a competitive market. To visualise monopsony power, we could think …
After keeping interest rates at close to zero for several years, the US Federal Reserve has moved to finally increase interest rates. This increase in interest rates is more significant than usual because it marks an end to the unique circumstance of ultra-low interest rates. The Federal Reserve has also indicated they expect to raise …
Disposable income is the amount of personal income – direct taxes. Example: In the UK, a person may have a gross salary of £31,000. But, after income tax and NI contributions have been taken off, their disposable income may be £19,000 a year. Discretionary income is the income available to spend. It is disposable (after …