Readers Question: Can you tell what Portugal has done to reduce the Current Account GDP deficit so steeply? The reduction in the Portuguese deficit is quite striking. In researching the answer to this question, I came up with a different post – The Portuguese Economic crisis From what I can gather, essentially, the rapid reduction …
To recover from a recession there needs to be either a rise in AD or a readjustment in prices and wages. Classical economists argue that a recession will only be temporary because labour and product markets are flexible. However Keynesians argue that wage and price rigidity can keep the economy below full capacity for a …
Economic Cost of Cars 1. Congestion Time lost which has a monetary value Frustration Increase in pollution Increased cost of petrol 2. Pollution Unleaded petrol has helped reduce lead, but there is still a problem of carbon dioxide and nitrogen dioxide exacerbating global warming Also an increase in respiratory problems such as asthma 3. …
– Positive economics: based on facts and testable theories e.g. inflation is 2% – Normative economics: based on opinion – Opportunity cost: is the sacrifice foregone of the next best alternative – Demand curve will shift to the right if real incomes rise, price of substitute rises, price of complement falls, changes in taste Giffen …
A merger occurs when two firms join together to form one bigger company. Therefore, the new company will have an increased market share. However, this higher market share will have significant problems. The competition commission will be especially concerned because the new firm is likely to have more than 25% of the market share, which …
There was reduction in the surplus on the current account of the French balance of Payments between 1998 and 2000. Essay Question: Using the data, assess whether this reflects a deterioration in the performance of the French economy. AQA (15) The current account measures the balance of trade in goods and service between France and …
The UK government has a national debt of over 55% of GDP. It finances its debt by borrowing from the private sector. Its debt is managed by the Debt Management Office DMO 1. By issuing government bonds (gilt edged stocks) demand comes mainly from non- bank financial sector e.g. insurance co. i) e.g. Treasury 10% …
Pollution is seen as an example of market failure. In particular, pollution is an example of a negative externality – a cost imposed on a third party. For example, when driving a car, other people suffer from the emissions e.g. global warming, air pollution. Therefore, in a free market, there tends to be the overconsumption …