The ILO recently produced their growth and wages report for 2012/13. This suggested that across the developing world, labour markets are being characterised by falling real wages and a decline in labour’s share of national income. In particular: Real wage growth has been flat – even negative in the past few years. There is an …
Source: OBR Dec.2012 Public sector net debt as % of GDP is forecast to start falling in 2016-17. The OBR forecast a decline in public sector net borrowing to 5.1% of GDP in 2012/13. Before increasing to 6.1% of GDP in 2013/14 Part of the decline in the budget deficit 2012/13 can be attributed to …
Quantitative easing is a process where a Central Bank creates money electronically. It uses this new money to purchase assets and bonds (mostly government bonds) from commercial banks and financial institutions. For more see: Quantitative easing explained Quantitative Easing has helped many holders of government bonds who have benefited from selling bonds to the Central …
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Diminishing returns Diseconomies of scale Economies of scale Objectives of firms Efficiency Production Possibility Frontiers Diagram of costs Opportunity cost Profit Profit and revenue Profit maximisation Do firms maximise profit?
A merger will lead to a bigger firm and a greater market concentration. This can have both advantages and disadvantages for the public interest. A merger is likely to reduce competition and give the new firm more market power. Therefore, it will be able to increase prices leading to a decline in consumer surplus and …
– 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 …