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I studied PPE at Lady Margaret Hall college, Oxford University, and currently work as an Economics A Level teacher. I have also examined several different economic units for Edexcel AS and A2.
Related
Hi. I want to know the economic contribution of elderly people in the development of a country? Thank you beforehand.
What would be the impact of a decision to raise interest rates in an economy where there is both a high rate of inflation and a large current account deficit?
Thanks.
Hi JAMES
It is really interesting question. When central bank increases rates it is generally
believed that inflation will slow. High rates would decrease liquidity . People would have
less cash to spend. High rates will also make borrowing more costly. They will
increase opportunity cost of business. Thus there will be less investment.
High rates cools the economy.
But they have some limitations. They works at some level.
Actually interest rates, inflation and budget deficits have strong relations.
If anyone say he can control inflation just with interest rate , he is wrong.
Only interest rate will not work.
If a country has increasing budget deficits, increasing trade deficits, and increasing population. How a bank can control inflation with interest rate.
Interest rates cool the economy but budget deficit, production growth & current account
are also very important in inflation.
Hi Saynogirl
Elderly people have very little role in economy, specially in developed country.
Most of them take pension and do not work. They do not create value and just behave as
a consumer. They do not work as value producer in economy but work as coordinators.
They encourage employment. They take pension & spend it. Thus they create demand.
This demand has good role in economy. Their role is positive in employment.
Actually in modern age of technology, a person can produce much more than he can consume. This creates economic cycle coordination problem. They acts dummy role and
give balance to economy. But economy also have to pay their cost
Hi Anath
After war, if petrol prices increased this can hurt car demand
If car demand is highly elastic , then car producers have to bear more.
Hi,
I’m interested in researching/learning more about the distribution of wealth. I know the Gini coefficient is used to measure income inequality from a purely equitable basis. I’m wondering if there is any research in what income distribution would be under a pure market model.
In other words, imagine a theoretical pure market. Set up a chart with income on the x-axis and percentile (from 0-1) on the y, would you expect a linear progression, a concave cure, or a convex curve.
Any insight on this or references to other literature would be great.
Hi Eli
There are also Hoover index & Theil index. Income inequality would be less in pure
market. In pure market there would be less margins for owner. I could not understand your question. Income distribution does not have very strong relation with distribution of
income.
What is the macroeconomic controversies
this site it help much cos i use it all time to know things more
How can a larger government fiscal defecit cause a larger international trade defecit?
hello,
Why will real gdp tend to rise when gov spending and taxes rise by the same amount?
How can a larger government fiscal deficit case a larger international trade deficit
what is merges and restrictions in economics
How would investing in cash protect against rising interest rates? What is the downside of this approach?
Hi Allan
There are so many controversies in macro economics. In macro economics, production possibility frontier , generally it is assumed there are two outputs. But third and many other may be alternative to each other. Unlike in Physics, in Economics it is not possible to conduct experiment to prove any law. For finding its substitute, in economics we almost rely on historical events. Austrian school of economics does not agree with mathematical model of economics . And believe there is no need of Government ‘s participation in economy . But most other economist do not agree. Neoclassical macroeconomists do not agree with laws of Keynesian economics. Say’s law says that supply creates its own demand. Many economist had believed that there can not unemployment in free economy in long run. Most economists agree that nominal interest rates cannot fall below zero. However, some economists from the Chicago school reject the existence of a liquidity trap. There are many issues from small to big on witch economists do not agree with each other. But with time, old debates finish and new start.