Why is monetary policy easier to conduct than fiscal policy in a highly divided national political environment? Monetary policy is usually implemented by independent monetary authorities. For example, in UK, monetary policy is implemented by the Monetary Policy Committee of the Bank of England. Therefore, they can take politically unpopular decisions such as increasing interest …
Readers Question: what are the reason of dollar appreciation while the world economic situation is not good! i would apprecitae if you provide me a simple comprehensive answer. Many factors would normally make the dollar depreciate (fall in value) US interest rates cut to 1% US current account deficit US entering into recession Uncertainty over …
Readers Question: Low inflation but slow economic growth, if any, or GDP growth , with the risk of 2 digits inflation? Which one is a better option,or the least harmful? The choice is not enticing. These are some point to consider: At the moment the UK economy is experiencing inflation of 5% (above the target …
The House of Representatives voted against the initial $700bn bailout. Though some bailout is likely to go through in a different form. The Problem with the bailout was: Buying worthless assets, won’t solve the causes of the credit crunch. It won’t solve the problem of home repossessions, falling house prices and the fact banks have …
Readers Question: Should we worry about water running out? In a way, water is a renewable resource. From a global perspective, water is almost infinite in supply. However, there can be serious water shortages in local areas. This is becoming an increasing problem due to population growth, climate change and rapid economic growth. Also, it …
Readers Question: Please explain the role that property plays in a country’s economic development. Property rights are important for giving firms the incentive and confidence to invest. Firms need a profit incentive to invest in buying capital and investing in equipment. Without the guarantee of private property, their profit is a risk. This is important …
USA’s trade deficit with China was $201.6 billion in 2005, an all-time high for a trade deficit with any country. Explain some possible causes of a balance of trade deficit and consider if the USA should be concerned over its trade deficit with China. Reasons for Balance of Trade Deficit Between US and China 1.Undervalued …
Readers Question: Discuss the likely economic impact on absolute and relative poverty of China’s rapid economic growth? It is an interesting question because even the Chinese government have been concerned that China’s rapid economic growth has not helped large sections of the population, especially in the north. Absolute poverty is defined as the minimum level …