Readers Questions Could you please explain the comparison between the Keynesianism & monetarism? Keynesianism emphasises the role that fiscal policy can play in stabilising the economy. In particular Keynesian theory suggests that higher government spending in a recession can help enable a quicker economic recovery. Keynesians say it is a mistake to wait for markets …
Readers Question: Hello can you please tell me what the disadvantages of using interest rates would be for the economy? Interest rates are used to try and achieve low inflation and stable, sustainable economic growth. However, interest rates are limited, they can’t always achieve all the governments’ macroeconomic objectives at once. Interest Rates and Inflation …
ex ante is Latin for before the event. ex ante means we look at future events based on possible predictions. ex post is Latin for after the event. ex post means we look at results and events after they have occurred. Example of ex ante and ex post There is an example of ex ante …
In the 1930s, George Orwell volunteered to spend time down a coal mine to find what life was like for coal miners. For the six foot, middle class, old Etonian, the experience of going down a mine was a real shock. The experience left him sore and full of admiration for those who worked down …
Readers Question: Is outsourcing beneficial for multinationals and their home countries? Outsourcing occurs when a firm delegates an aspect of a business to another firm. This may be to a firm in another country. For example, a large multinational may outsource cleaning to an outside cleaning firm. It may also ‘outsource’ its customer support call …
Many Western economies face a demographic time bomb – an ageing population, which places strain on government spending and the welfare state. To deal with this situation, governments face several difficult choices – Raise taxes to pay for pensions, Shift the emphasis on to the private sector provision of pensions, Raise the retirement age Cut …
The mobility of labour refers to how easily workers can move to different jobs within the economy. The two main factors of labour mobility are: Geographical mobility – how easy is it for a worker to move between different regions and countries to seek new work. Occupational mobility – how easy is it for a …
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 …