Looking at graphs for the saving ratio, I noticed a paradox. When people felt it was a good time to save more, they actually saved less. When people felt it was a bad time to save, they actually save more. Is it a Good Time to Save? As part of the GFK consumer confidence survey. …
Definition: Gross fixed capital formation is essentially net investment. It is a component of the Expenditure method of calculating GDP. To be more precise Gross fixed capital formation measures the net increase in fixed capital. Gross fixed capital formation includes spending on land improvements, (fences, ditches, drains, and so on) plant, machinery, and equipment purchases; …
The UK government has given the Bank of England an inflation target of CPI 2 % +/-1. The Bank of England is responsible for using monetary policy (e.g. interest rates) to achieve this goal of low inflation. But, as well as targeting inflation, the Bank of England also has a wider remit of considering objectives …
International competitiveness measures the relative cost and value of a countries exports. For example, if UK goods and services become more expensive than its competitors, then the UK would see a decline in its international competitiveness. International competitiveness is determined by Short-run factors – inflation and exchange rate Long-run factors – Education, health-care, institutions, levels …
Distribution of income refers to the relative incomes that people have within an economy. For example, in the UK the poorest 10% of people have roughly only 2.5% of the nations total income. The richest 10% have approximately 35%. This suggests there is a degree of relative poverty because the richest have a bigger % …
The UK recession of 1991 was primarily caused by high-interest rates, falling house prices and an overvalued exchange rate. Membership of the Exchange Rate Mechanism (1990-1992) was a key factor in keeping interest rates higher than desirable. The recession also came after the late 1980s economic boom – a period of high economic growth and …
The natural rate of unemployment occurs when the labour market is in equilibrium; it is mainly composed of frictional and structural unemployment. The natural rate of unemployment is affected by supply-side factors such as geographical/occupational immobilities and labour market imperfections. Firstly, it is argued the level of unemployment benefits can affect the level of frictional …
Deregulation involves removing government legislation and laws in a particular market. Deregulation often refers to removing barriers to competition. For example, in the UK, many industries used to be a state monopoly – BT, British Gas, British Rail, local bus services, Royal Mail. However, deregulation allowed new firms to enter these markets and reduce the …