Readers question: Should the Government intervene to deal with the problem of Oil Shortages or is it better to leave it to a free market? As oil runs out, supply will shift to the left and the price will increase. Because demand is inelastic, oil firms will make increased profits. This creates an incentive for …
The price of oil reached another record high yesterday – $125 Brent Crude oil reached $126 US light crude oil reached $128 before setting back to $127 This means that, even adjusted for inflation, oil is now close to the all time high, last reached in the 1970s. What are the reasons behind the Recent …
Readers Question: Why is US in Recession? According to the latest statistics provided by the Economist April 24th 2008 US economic growth is 2.4% year on year. In the last quarter, growth is 0.6%. This is still a long way off the technical definition of a recession – negative economic growth for two consecutive quarters. …
Readers Question: The Bank of England has released £15bn into the economy. That increase in the money supply will surely cause inflation? So interest rates having fallen will be raised, worsening the housing market and making the credit crunch even worse, not better….surely? The Bank of England is planning to inject money, primarily into the …
Readers Question: Hi, Please could you explain this question. Contrast the likely effects of monetary policy decisions on the price of housing and shares. Monetary Policy involves changing interest rates to try and influence aggregate demand and target low inflation and high growth. If inflation was increasing above the government’s inflation target, they would increase …
Readers Question: when will oil run out? It is difficult to say. Firstly on the demand side, demand for oil is rising faster than many expected. This is largely being driven by rising growth in developing economies such as India and China. Today we consume an average of 85 million barrels daily. According to the …
Readers Question: Evaluate the view that the most effective way to reduce poverty is to increase significantly the state pension. Pensioners account for a growing % of the population; therefore inequality and poverty amongst pensioners is becoming a significant cause of relative poverty in the UK. For several years, the state pension has been index-linked. …
Readers Question: suppose you are the governor of the bank of Canada .. and that inflation has been high and roughly constant for a number of years. you have two policy choices: you can attempt to eliminate the sustained inflation. Outline the issues involved when making this choice. list and explain the costs of ongoing …