Discrimination in the labour market occurs when employers make decisions on wages and employment based on prejudices, such as race, gender, religion. It can lead to variations in wages for the same job and different employment rates. Kenneth Arrow defined discrimination as: “the valuation in the market-place of personal characteristics of the worker that are …
Readers Question: how to illustrate the world financial crisis by using the graphs of aggregate demand and aggregate supply? The financial crisis has essentially caused an unprecedented fall in aggregate demand. Aggregate demand has fallen because: Bank lending decreased due to the credit crisis and shortage of bank funds. The shortage of bank lending has …
Readers Question: Will interest rates rise? Some say yes, my investment analyst/advisor says no (“because the UK is largely living on credit and the government and bank of England do not want a repeat of 2008”) Interest rates will rise when the Bank of England feel the economy has returned to a normal trend of …
Readers Question: What are the implications of a higher dependency ratio? The dependency ratio measures the % of dependent people (not of working age) / number of working people. Children (0-15) + Number of elderly (> 65) ———————————————— Number of working age (16-65) In the western world, we are seeing an increase in the dependency …
An economic downturn implies a fall in real GDP. A downturn also includes that period just before a recession – with a fall in the rate of economic growth and a widening output gap. A downturn will also include a period of negative economic growth and recession. An economic downturn is part of the economic …
Barack Obama served as President from Jan 2009 – Jan 2017. When Obama came to office in Jan 2009, the US economy was in a deep recession, with falling real GDP, high unemployment and rising levels of government borrowing. As President, Obama oversaw a moderate fiscal expansion which helped to promote economic recovery and falling …
Summary – If a country has a higher inflation rate than its competitors, then its good will be increasing in price at a faster rate and therefore, they will become relatively less competitive. It will experience less demand for its exports and therefore less demand for its currency. This will tend to cause a depreciation …
The US Dept of Food produces an interesting service on offering estimated elasticities of demand. [link] This graph shows the Cross Elasticity of demand (XED) for various goods with respect to food. I choose two countries – Bangladesh (low income) and the UK (relatively high income) Source: [link] What this means is that if the price …