The economic trade cycle shows how economic growth can fluctuate within different phases, for example: Boom (A period of high economic growth usually causing inflation) Peak (top of the trade cycle, where growth rates may start to fall) Economic downturn/recession (where the growth rate falls and may become negative – leading to a fall in national output) …
The fiscal multiplier effect occurs when an initial injection into the economy causes a bigger final increase in national income. Suppose the government pursued expansionary fiscal policy. The aim of expansionary fiscal policy is to increase aggregate demand (AD) and boost the rate of economic growth. This could involve the government increasing public sector investment …
Readers Question: Is there an economic term for the phenomenon of ignoring (or turning a blind eye to) future risk, assuming that the current situation will prevail? I refer to the situation we currently see of both borrowers and lenders who are being caught by interest rate rises, having seemingly assumed that interest rates would …
A look at the benefits and costs of capital flows.
What do we mean by balanced economic growth? Also, is it important for an economy to promote a balanced approach to growth? A balanced economy suggests that economic growth is sustainable in the long-term, and the economy is also growing across different sectors – and not focused on one particular industry or area. A balanced …
What would be the impact of the US placing a tariff on the import of steel and aluminium into the US A tariff on imports of foreign steel would raise the price of imported steel and encourage US firms and consumers to buy domestically produced steel instead. At the moment, American producers find it cheaper …
A trade deficit occurs when the value of imports of goods and services is greater than the value of exports. For example, in 2016 the US exports totalled US$ 1,450,457 million. Imports totalled US$ 2,248,209 million. (WITS) Source: Trade balance at St Louis Fed. Since 1990, the US has run a persistent trade deficit. The …
Trade unions provide an organisation for workers to have joint representation with their employers. Trade unions have several functions: Represent workers with regard to pay and working conditions. Bargain for higher wages with the possibility of going on strike to target higher wages. Co-ordinate with firms to implement new working practises and negotiations with workers …