Source: World Bank This shows the price of petrol per litre around the world. Varying in price from $0.02 a litre in Venezuela to Eritrea with a price of $3.33. Generally Western European economies have the highest price of petrol due to higher petrol tax. Out of 217 countries listed by the world bank. Most …
In economics, marginal analysis means we look at the last unit of consumption/cost. It gives a different picture to the total cost. For example, the total cost of flying a plane from London to New York will be several thousand Pounds. However, with a plane 50% full, the cost of carrying one extra passenger is …
Readers Question: Could you please explain how positive externality (external benefit) lead to market failure in property industry? A positive externality occurs when a third party benefits from the production or consumption of a good. In many cases, building the right kind of housing can have benefits to the rest of society. Therefore, the social …
Readers Question: Is rise in prices a reflection of economic growth? A sustained rise in prices is known as inflation. A large rise in prices / higher inflation rate is often caused by economic growth. However, there are also occasions, when we can get inflation despite weak or negative economic growth. Inflation caused by economic …
After the UK’s decision to leave the EU, what economic problems will it face? Summary of problems Devaluation of Pound Sterling, increasing price of imported goods, such as food, oil, manufacturers and domestic inflation. This cost-push inflation is again putting pressure on real wages. WIth low nominal wage growth – inflation has led to falls …
Supply side policies are government policies which seek to increase the productivity and efficiency of the economy. They can involve interventionist supply side policies (e.g. government spending on education) or free market supply-side policies (e.g. reduce government legislation) The main macroeconomic objectives of the government include: Higher economic growth Low inflation Low unemployment Equilibrium on …
Readers Question: Why do we Study Economics In School? 1. It’s good to study and improve the mind. At least, that is what I was told when I was learning ancient Greek and Latin. Many employers are not looking for a specific degree but, the ability to learn, write and understand relevant ideas. I guess …
Monetary policy (mainly interest rates) used to be managed by the government. However, in recent years, there has been a trend to give monetary policy to independent Central Banks. The idea is that Central Banks will be more independent of political considerations and willing to keep inflation low – even if there are political costs …