If a large firm / industry becomes unprofitable and appears in terminal decline, what should the government do? If the firm goes bankrupt, it will lead to the loss of thousands of jobs, and negatively affect the areas where the firm is based. See: Problems of industrial decline. This creates a strong economic and political …
Readers Question is recession causes unemployment or unemployment causes recession? Essentially, it is a recession which causes unemployment. As output and demand fall, firms cut back on hiring new labour. This leads to a rise in unemployment as there are fewer job vacancies. Graph showing rise in unemployment after 2008 recession Also, some firms may …
Definition of Frictional Unemployment This is unemployment that occurs from the inevitable time delays in finding new employment in a free market. It may also be called ‘search unemployment’ as it relates to the time taken to search for new employment. For example, if you graduate from university, you can’t necessarily expect to find …
TIPP (Transatlantic Trade and Investment Partnership) is a potential trade deal between the EU and US. It is currently being negotiated by the European Commission and the US. The aim of the agreement is Encouraging trade and investment between the EU and the US. Extend principles of European Single Market to include the US, enabling …
Readers question: explain benefits of increasing rate of unemployment benefit – for the unemployed , society and any cost that may result from such policy. Current Weekly Rates of Job Seekers Allowance in UK Contribution-based JSA Age JSA weekly amount 18 to 24 up to £57.90 25 or over up to £73.10 Contribution based …
Readers question: should the government focus on achieving a particular macroeconomic objective over the others? This is a good question. There is a lot that can be said because it encompasses so many different topics. Firstly, the three main macro-economic objectives: Higher economic growth Low inflation Low unemployment There are also less important objectives Reducing …
Greece is a very good example of the damage of austerity can do to both economies and the social fabric of a country. Firstly Greek austerity is almost unprecedented in its scope and intensity. Greece government spending and revenue Greek government spending was cut from €120 bn in 2008 to €90 bn in 2014. To …
Bank of England base interest rates are currently 0.5%. Economists are divided about when interest rates will rise. Some point to the evidence of a strong economic recovery to suggest interest rates could rise by mid 2015. Others argue that the strong global deflationary pressures mean that UK inflation is likely to stay very low …