Readers Question: ‘Trading blocs are the most significant factor contributing to globalisation’ To what extent do you agree with this view? Trading blocs are groups of nations who form an economic union or area of free trade. For example: The European Union aims at not just a customs union but also economic and monetary union …
Definition A positive feedback loop is a situation where two events are mutually reinforcing. With this situation, a small change in one input can cause a bigger final increase in both the initial input and the secondary effect. Suppose, there is a rise in demand for buying a commodity. This rise in demand leads to …
Since 2010, the UK economy has been dominated by spending cuts and the desire to run a budget surplus as soon as possible. In the political world, the government deficit is often portrayed as the source of many economic ills and eliminating the deficit one of the highest macro objectives. However the government deficit (see: …
Readers Question: When does velocity of money pick up and why will it? Clearly, the reason US inflation worriers have been wrong so far (NB). Is it confidence or policy? The velocity of circulation / velocity of money refers to how frequently the money stock in an economy is used in a given period. In …
An examination of the advantages and disadvantages of congestion charges: Some cities, such as London have introduced a congestion charge. The aim of a congestion charge is: Reduce congestion. Therefore reduce time wasted and reduce costs for business Reduce pollution. Fewer cars will lead to less pollution. Make city centres more attractive for pedestrians and …
Unemployment in many European countries has risen sharply due to the credit crunch and global recession. The worst hit countries include Spain (ES) and Greece (EL), who both have unemployment rates of over 24%. In the past few months, there has been a slight reduction in European unemployment, but the prolonged period of mass unemployment …
Housing equity withdrawal (HEW) is new borrowing secured on dwellings that is not invested in the housing market (e.g. not used for house purchase or home improvements). From Q1 2007 this is called Housing equity withdrawal (HEW) rather than its old name of Mortgage Equity Withdrawal. (MEW) Source: Housing Equity Withdrawal at Bank of England. …
Readers Question: How Long do Recessions last? There is no exact answer. Recessions can last for varying time lengths depending on the causes and also the response of governments and consumers. If recessions are caused by a tightening of monetary policy (higher interest rates to reduce inflation), then it tends to be easier to get …