Global economic imbalances refer to an unfair distribution of resources between different countries or it may refer to a one-sided trade situation. Global economic imbalances include Balance of Payments. Unbalanced trade between different economies, e.g. US trade deficit with China Unemployment levels, e.g. high unemployment in southern Europe versus low unemployment in US, UK. Poverty …
Monetary policy involves influencing and controlling the money supply/interest rates to target inflation and economic growth. Monetary policy primarily involves changing interest rates, though it can include other tools such as quantitative easing and open market operations. In recent decades there has been a trend to making Central Banks independent and responsible for setting interest …
How does the minimum wage affect aggregate demand/aggregate supply and macroeconomic factors such as inflation, unemployment and economic growth? A minimum wage is the statutory minimum wage that employers can pay per hour. In 2019, the UK minimum wage was set at £8.21 an hour for workers over 25. In the US, the federal min …
Currency substitution occurs when an economy uses an alternative currency to the domestic currency. The alternative currency maybe used in parallel to the domestic currency or some cases may completely replace it. Currency substitution can also be referred to as ‘dollarisation’ when the dollar is used. Examples of countries with official currency substitution include Ecuador …
A look at some arguments for and against public/private healthcare provision. Should healthcare be left to the free market or should the government provide universal healthcare? Arguments for Public Health Care Healthcare is not a profit maximising industry. Doctors and nurses don’t need financial incentives to do a good job but are motivated by aims …
Readers Question: What’s the relationship between a countries economy and it’s stock market? Is it always true that the stock market reflects a country’s economic conditions? Generally speaking, the stock market will reflect the economic conditions of an economy. If an economy is growing then output will be increasing and most firms should be experiencing …
A leveraged buyout occurs when a firm is bought by a group of investors who borrow a large proportion of the money needed to buy a target firm. Often the investors will use the assets of the target firm as collateral for borrowing money. Leveraged Buyouts are often highly aggressive methods of taking over an …
Readers Question: In the U.S. I have noticed that most restaurants and fast food places have window signs advertising for workers. Would these minimum wage workers, as a collective, be considered a monopsony or a monopoly? To answer your question, these minimum wage workers would be considered neither a monopoly or monopsony. The fact that …