The wealth effect examines how a change in personal wealth influences consumer spending and economic growth. Rising wealth has a positive impact on consumer spending. Wealth is a stock concept. At a particular time, your wealth is fixed. Wealth is comprised of savings, bonds, property and assets. A major form of wealth in the UK …
Readers Question: Has Japanese government debt always been so high, or is this a recent phenomenon, caused by the high public spending during the country’s ‘lost decade’? No, Japan’s national debt has definitely increased since the bubble burst in the late 1980s. Debt as a % of GDP has increased because of various spending increases …
Between 2009-16 the Portugal economic experienced a severe economic crisis – characterised by falling GDP, high unemployment, rising government debt and high bond yields. This was caused by a combination of the global recession, lack of competitiveness and limitations of being in the Euro. What caused the Portuguese economic crisis? In the period Q4 2o10 …
Readers Question: How is Japan able to run a national debt of nearly 240% of GDP? (from: List of National debt by Country) In 2017, Japanese public sector debt rose to one quadrillion yen ($10.28 trillion) representing 239% of GDP. This compares to 2013, when government debt was 227% of GDP. This is significantly …
A recession is a fall in real GDP/ negative economic growth. To avoid a recession, the government and monetary authorities need to try and increase aggregate demand (consumer spending, investment, exports). There is no guarantee that they will work. It will depend on the policies and also the causes of the recession. The primary policies …
Definition: The money supply measures the total amount of money in the economy at a particular time. It includes actual notes and coins and also any deposits which can be quickly converted into cash. There are different measures of the money supply. Narrow Money e.g. M0 = This is the level of notes and coins …
A capitalist economic system is one characterised by free markets and the absence of government intervention in the economy. In practice a capitalist economy will need some government intervention, primarily to protect private property. (This is important to distinguish capitalism from anarchism, where there is absolutely no government present) Features of a capitalist economic system …
There are different ways to measure the biggest companies. These are three methods: Market capitalisation – using FTSE all share index Revenue/sales Largest number of employees Top 10 UK firms by market capitlisation Rank Name Mkt cap (£m) 1 Royal Dutch Shell 178,414.2 2 HSBC Holdings 145,979.6 3 British American Tobacco 106,613.6 4 BP 90,115.0 …