Definition Trade liberalisation involves removing barriers to trade between different countries and encouraging free trade. Trade liberalisation involves: Reducing tariffs Reducing/eliminating quotas Reducing non-tariff barriers. Non-tariff barriers are factors that make trade difficult and expensive. For example, having specific regulations on making goods can give an unfair advantage to domestic producers. Harmonising environmental and safety …
What are some of the biggest misconceptions about how the economy works? Some misconceptions Economists can make reliable forecasts. Presidents control the economy – Policies of government only partially responsible for economic activity. Luddite fallacy. – Misconception that new technology destroys jobs. Broken window fallacy – Misconception paying for damage creates economic activity. The lump …
Globalisation involves the increased integration and interdependence of the global economy. It means there will be a rise in trade, and increase in movement of labour and capital. There are both pros and cons of globalisation. The benefits include greater competition, lower prices, economies of scale. Critics argue globalisation can leave many left behind due …
A maximum working week is a legal limit on the standard number of hours that can be worked in a week. For example, in 2000 France passed a maximum working week of 35 hours. Additional hours could be worked, but they had to be paid at an overtime rate of +25%. At the 2019 Labour …
Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential. According to the OECD, human capital is defined as: “the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services …
Economic growth means an increase in national income/national output. If we have a slower rate of economic growth – living standards will increase at a slower rate. For example, in the post-war period, western economies grew at 2.5% to 4.% per year. However, since the early 2000s, growth rates have slowed down. This process of …
There are different forms of socialism but for this blog will use the form of democratic socialism advocated by Socialist parties in Western Europe. For example, Nordic countries where government spending is between 40-50% of GDP. This brand of socialism believes in: Redistribution of income and wealth through a progressive tax system and welfare state. …
A recession is a period of negative economic growth. In a recession, we see falling real GDP, falling average incomes and rising unemployment. This graph shows US economic growth 2001-2016. The period 2008-09 shows the deep recession, where real GDP fell sharply. Other things we are likely to see in a recession 1. Unemployment The …