Readers Question: What will happen to the value of a currency during times of deep recession and high inflation? There is no hard and fast rule about what will happen to the value of a currency during a deep recession – though, a currency is likely to fall because country becomes a less attractive place to …
Summary: Wage inflation is an increase in nominal wages, meaning workers receive higher pay. Wage inflation tends to cause price inflation and higher growth. The impact of wage inflation depends on whether it is a real increase (higher than inflation) or just nominal increase (same wage increase as inflation). The effect also depends on labour …
The main sectors of the economy are: Primary sector – extraction of raw materials – mining, fishing and agriculture. Secondary / manufacturing sector – concerned with producing finished goods, e.g. Construction sector, manufacturing and utilities, e.g. electricity. Service / ‘tertiary’ sector – concerned with offering intangible goods and services to consumers. This includes retail, tourism, …
A zero-sum game is a situation where one party benefits at the equal cost of another. If we add gains and losses the net benefit will always be zero. If two players have an arm wrestle challenge, there can only be one winner and one loser. It is not possible to arm wrestle and both …
GDP measures gross domestic product. It is a measure of a nations economic output/income/expenditure. GDP is an excellent guide to the total number of marketable goods and services produced and consumed in an economy. It is a useful economic statistic – especially for managing the economic cycle, but has often become a short-hand for economic …
Readers Question: Where does the UK government get its money from? UK tax revenues come from a variety of sources. The main sources of tax revenue include: Income tax (main tax rate is 20%) National Insurance (NI) – a form of income tax VAT (20% on most goods and services) Corporation tax Council Tax (local …
Global warming is a major economic and social problem facing the world. One study by Swiss Re, a provider of insurance suggested global warming could cost $23 trillion in lost output by 2050. In addition to the economic costs are perhaps the much more important costs to the environment, natural habitats and the life chances …
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 …