A look into the effect of higher oil prices on economies, firms and consumers. Effect of Higher Oil Prices on the EconomyWatch this video on YouTube Readers Question: With oil prices rising towards $100, what are the economic effects of rising oil prices? In the short term, higher oil prices will lead to higher …
The Dutch disease refers to the problems associated with a rapid increase in the production of raw materials (like oil and gas) causing a decline in other sectors of the economy. When the raw materials run out, the economy can be in a worse position than before. – Can the discovery of substantial raw materials …
One of the great events in European economic history was the great plague of the 14th Century. The Black Death, which swept across Europe (killing up to 30% of citizens), led to a profound change in economic circumstances. Due to the shortage of labour, peasants were freed from their serfdom. With great demand for labour, …
It is argued cutting corporation tax rates can increase total tax revenue. This is because: Lower corporation tax will encourage more multinationals to invest in that country Lower tax rates enable firms to invest more – this leads to higher growth and therefore, higher tax revenues. Lower tax rates reduce the incentive for firms to …
Definition – Collective bargaining refers to the negotiations between a group of workers and firms. Workers, usually through a trade union, form a unified approach to negotiate wages and work conditions with their firm (or group of firms). Collective bargaining can involve many different aspects of work – including pay, health and safety, working hours, …
Definition Wage-push inflation is the increase in general price level resulting from higher wages in an economy. Explanation of wage-push inflation If firms increase nominal wages by 5%, they experience higher costs of production. This is likely to cause firms to pass the cost increases onto consumers in the form of higher prices. Firms increase …
International trade between different countries is an important factor in raising living standards, providing employment and enabling consumers to enjoy a greater variety of goods. International trade has occurred since the earliest civilisations began trading, but in recent years international trade has become increasingly important with a larger share of GDP devoted to exports and …
An overvalued exchange rate implies that a countries currency is too high for the state of the economy. An overvalued exchange rate means that the countries exports will be relatively expensive and imports cheaper. An overvalued exchange rate tends to depress domestic demand and encourage spending on imports. An overvalued exchange rate can also be …