At different times there have been campaigns to ‘Buy British’ – patriotic efforts to support the economy. The campaigns seem quite popular, but usually fade out, having made little difference to major macro-economic variables. It is a form of economic nationalism and similar campaigns can be seen in many different countries. Buy British campaigns can …
Readers Question – When a war brakes out in the middle east, the price of petrol rises, and the price 0f a used Ford Falcon falls why? When a war breaks out in the middle east, there is likely to be disruption to the supply of oil. 50% of our oil comes from the middle …
Readers Question: How can a developing country grow without inflation? Economic growth can lead to inflation, for example, if demand rises faster than productive capacity, then we will see rising prices. However, economic growth is compatible with low inflation, and developing economies which can increase productive capacity and general efficiency can see rising living standards …
Quantitative easing is an unorthodox monetary policy aimed at stimulating economic growth and preventing a fall in the money supply. Just to recap, Q.E. involves: Central Bank creating money electronically. Using this extra money to purchase government bonds (and other securities) from banks and financial institutions. Q.E aims to: Increase bank liquidity. When commercial banks …
Readers Question: What is meant by economic uncertainty? Economic uncertainty implies the future outlook for the economy is unpredictable. When people talk of economic uncertainty, they usually imply there is a high likelihood of negative economic events. Economic uncertainty could involve. Predictions of a higher and more volatile inflation rate. (inflation uncertainty) Concerns over economic …
Recently, Liverpool supporters protested about plans to increase the price of many ticket (the most expensive seat in the Main Stand will now be £77). Many supporters complain that football tickets have risen well above the rate of inflation in recent years, making football less accessible to supporters on lower-incomes. But, what are the economic …
Vertical integration occurs when a firm controls different stages of production. For example, in the brewing industry, you have Production – Brewing of beer. Distribution – beer transported to local markets. Retail – Beer sold in pubs and shops. To remember vertical integration – think of going up the supply chain. Horizontal integration, by contrast, …
Readers Question: Economic theory says that when Quantity (Q.S) increases Price (P) should ordinarily fall. After the 2007 crisis in the USA, the FED pumped billions of Dollars into the economy through QE. However the price of dollars, interest rate has not only fallen lower, but is closer to zero as of today ( 2016). …