Readers Question: I am studying AS level economics and I have a homework which i’m stuck on. I was wondering what are the pros and cons of the government intervening in market failures such as those resulting from the immobility of labour, negative externalities and greater income inequality, following the closure of factories. It’s a …
Readers Question: Hi, Please could you explain this question. Contrast the likely effects of monetary policy decisions on the price of housing and shares. Monetary Policy involves changing interest rates to try and influence aggregate demand and target low inflation and high growth. If inflation was increasing above the government’s inflation target, they would increase …
Readers Question: Why government, rather than private industry, is required for an effective mosquito eradication program? An effective mosquito eradication program is an example of a public good. If you exterminate all the mosquitos it has the characteristics of Non rivalry. – When you benefit from living in an area free of mosquito’s it doesn’t …
Readers Question: Evaluate the view that the most effective way to reduce poverty is to increase significantly the state pension. Pensioners account for a growing % of the population; therefore inequality and poverty amongst pensioners is becoming a significant cause of relative poverty in the UK. For several years, the state pension has been index-linked. …
Readers Question: suppose you are the governor of the bank of Canada .. and that inflation has been high and roughly constant for a number of years. you have two policy choices: you can attempt to eliminate the sustained inflation. Outline the issues involved when making this choice. list and explain the costs of ongoing …
Readers Question Am I correct in assuming that electricity is an inelastic supply? Oil is in short demand, there are not many green/low emission replenishable supplies and in the short run this would explain the continued increase in prices for the consumer. I think that in the short term electricity supply is quite inelastic. When …
Readers Question: with economic scare, do you advise to invest? how do you predict inflation and interest rates will affect business? In the UK, interest rates have only fallen slightly since the start of the global credit crisis. The Bank of England has reduced rates from 5.75% to 5.25%. The Bank is still worried about …
Readers Question: What credit can the adoption of central bank independence take for the relative stability of the UK business cycle since 1997? The MPC, Bank of England, are responsible for setting interest rates and determining UK monetary policy. They seek to keep inflation close to the government’s target of CPI 2% +/-1 % Between …