How do problems in the Eurozone economy and a weak Euro affect the UK? A weaker Euro would help European goods and European travel appear more attractive. It would be good news for British holiday makers not wanting to risk transatlantic flight with the Icelandic volcano still smoldering. It would not be good news for …
If you are studying for exams, you will hopefully, be learning that the value of a currency is generally influenced by factors such as: Interest rates – low interest rates lead to hot money flows out of economy and a weaker exchange rate. Relative inflation rates – Higher inflation makes a countries exports uncompetitive and …
Readers Question: Does it (financial crisis) have any possible positive effects for the future? It is an opportunity to repair a broken financial system and put in safeguards to prevent future boom and busts. For example, we could have policies which banks automatically hold more deposits during a boom to provide counter cyclical instruments. Better …
I was looking at the scale of previous recessions. The current recession, which technically ended last quarter with a 0.1% rise in GDP, is the second worst on record. I was surprised to find that in the Great Depression, UK GDP only fell 10%. However, it is somewhat misleading. The UK economy struggled in the …
Readers Comment: I believe if you want to solve the recession then look at footballers. they earn millions and for what/kicking a ball around!! I think their wages should be cut down to say 75k a year and the remaining money should be used wisely. This recession illustrates that economic policy often involves making decisions …
Readers Question: discuss whether economic actions by individuals always results in net benefit to the society “Many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own …
A good thing about studying economics is that new issues crop up. A year ago, few people would have heard of quantitative easing, but, now it is has become an important part of UK monetary policy. Because it is relatively untried, there is a degree of uncertainty how it will work and whether it will …
Readers Question: What is Sensex and impact on economy? The Sensex is the leading measure for the Indian Stock Market. It is based on the 30 Largest trading companies on the Bombay Stock Exchange BSE (India’s primary financial market) Like other indexes, the Sensex is recalculated at various times to change the 30 largest trading …