You are welcome to ask questions on Economics. Though you might also like to try google custom search (top right) to see if the topic has been covered before.
I am looking to explain economic principles / ideas/ recent developments in economics. I can’t promise to answer, but will try if it meets the criteria below.
- Please don’t ask me to do your coursework / assignment e.t.c.
- Please don’t ask any maths calculations.
- The question and answer will be published here where everyone can see it (including your teacher).
- I aim to try and simplify economics; as a rough guide I would aim at an understanding similar to a good British A Level student.
- I am looking to explain economic principles / ideas/ recent developments in economics.
- I will answer as a new post, if you leave email address, I’ll usually send quick email. Check home page of blog for new post. With question and answers
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.
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What government policies and proposals are in place to reduce our deficit? and where can i find some information about it? websites, agencies ect…
What are the main links between crime and a stagnating economy? (Speculation of an increase due to rioting in 2011)
An economy can’t function without the rule of law. However the whole situation is a spectrum. We see good law enforcment in western countries, heance their economic performances.
Hi, May i know some examples to form a good ratio for domestic economy?
Currently, this is my idea…..”Domestic economy – avg personal income / GDP per capita”
We hear much about the “pensions time bomb”, as people tend to live longer and there is a bulge as “baby boomers” reach retirement age. We also hear much about the need to save for retirement.
Saving *money* may mean people have more money in retirement but surely the real problem is to ensure there is more output; money is worth only what it can buy.
Is there a risk that money saving will simply simply reduce current output and so reduce the income and incentives needed to ensure we have the investment that will enable us to increase output over time?
It is easy to see how it makes sense for an individual to save for retirement but at the national level it may be counterproductive.
Hi,
What is the likely impact of monetary policy on the financial markets today?
my question is If the U.K. had joined the euro back when it first started would the U.K. have benefited like Germany or would we be in the same situation as Greece, Italy, and Spain
It’s hard to say. The maket attitudes towards debt levels depends upon the amount of debt relative to GDP and the overall strangth and confidence in their economies.
Greece ran up huge debts relative to the Greek GDP, but so has California! Equally, California, like Greece, is not allowed to default and can not debvalue its currency. However, the markets have serious doubts about the competitiveness of the Greek economy, and heance their ability to honour their debt commitments. By contrast, calafornia is the USA’s richest state and has a very competitive economy. The markets aren’t worried about California.
The economist Niall Ferguson points out that the danger point for debt levels in each country vary, but that each country does have one. If the USA continues having a deficit of a trillion dollars per year it will eventually get into the Greek situation, but who knows when that will be? Maybe its a few years from now, maybe it’s decades away, but if that deficit continues it will hit the danger point.
Britain is a much more competitive country than Greece. The markets would probably not have called time on the UK economy yet, but it’s impossible to tell, and not easy to see coming!
Hi. I do not really understand the implication of purchasing power parity on the equation. e=P*/P. Any easy example to explain? My textbook did give an example but i do not understand this one part, It says “At home, the price level is P, so the PP of $1 at home is 1/P That is a dollar can buy 1/P quantity of goods” – Why is it 1/P?
“If the purchasing power of a dollar is always the same at home and abroad, then the real exchange rate cannot change.” Why RER cannot change? Hope to get your reply soon. Thank you
Qith the amount of quantitative easing which is going on why aren’t we seeing rampant inflation? What’s the difference between simply printing money, ie “Helicopter money” and quantitative easing?
Hi Tejvan,
My first memories are of the early 1970’s – some 40 years ago. Since then the per capita, inflation corrected GDP for the UK has more than double. In my naive understanding of economics this means that we are now producing and consuming twice as many goods and services. Perhaps we could be considered twice as ‘efficient’ as we were or to be working twice as hard?
The inflation corrected median salary hasn’t changed much.
When I compare my life with my fathers at that time the conditions are near identical in the greater things or life. I work the same hours, maybe more. I have the same holidays. I have a similar standard of material comfort (a washing machine, a car, heating, a beer when I want one) although with a lot more ‘stuff’ in terms of gagets (TVs computers etc). My father retired at 60. I’ll have to work to 67.
There is much emphasis put on growth in the economy yet over this period a *doubling* in the size of the economy has not given me (and the vast majority of people like me) any major advantages in terms of free time or choice of what to do with my life.
Accounts I read on economic growth don’t address my fundamental question about why we should have a growing economy when such major changes in GDP over the medium term seem to have little effect on real people’s lives.
Increasing efficiency in production should lead to a reduced demand for labour and more free time or greater unemployment but never does. We need fewer people on the land, fewer people in our factories and now fewer people to administer things or even work in shops. Where are new jobs coming from? Are they all ‘make weight’ jobs designed to justify distribution of wealth created by a small section of the populous?
Put simply, other than consumer confidence, why do we need to have more valuable transactions tomorrow than today? It is easy to see why growth is necessary in a developing economy where basic need aren’t met and growth means more food but why do we need it in a modern western economy?
Sorry such a long preamble to a short question.
Many thanks,
Roger
Hi there! I have 3 questions! First is on microeconomics. When market fail happened, government can intervene to promote efficiency and equity. How government can intervene? & in what way?
Another question is about macroeconomics – market for loanable funds in open economy. If the interest rate above the equilibrium level, quantity of loanable fund supplied would be more than the quantity demanded. So there will be a surplus on loanable fund but why it will drive the interest rate downward?
Last question is about the implication of purchasing-power parity. The given example in the Mankiw textbook : Suppose that P is the price of a basket of goods in the US (measured in dollars), P* is the price of a basket of goods in Japan (measured in yen), and e is the nominal exchange rate (the number of a yen a dollar can buy). Now consider the quantity of goods a dollar can buy at home and abroad. At home, the price level is P, so the purchasing power of $1 at home is 1/P. That is a dollar can buy 1/P quantity of goods. Abroad, a dollar can be exchanged into e units of foreign currency, which in turn have purchasing power e/P*. For the purchasing power of a dollar to be the same in the two countries, it must be 1 = eP/P*.
I do not understand the equation and the example. any more simpler example?
Thank you so much!!!
(ESSAY) Normative statement: Foreign direct investments into the copper industry in Zambia will ensure prosperity for the zambian people.
Analyse from elasticities point of view.
1. Explore the question, defining the key terms
2. Diagrams,
Written analysis incorporating the diagrams
Real world examples.
3. Evaluation
Prioritise the arguments
Order the stakeholders
Long run, short run effects
Analyse with diagram using an alternative theory or perspective.
Guys this is my assignment for economics, I need help as I do not really know what to do for the different steps, can anyone give me advice. Especially real world examples and what kind of graph etc.
Hello Tejvan,
I wonder if you could possibly help with the problem we encountered when were tying to calculate PED and a change in TR in a random example.
By taking random numbers we have found ourselves in a situation where TR has not increased when the price increased, given that D was price inelastic.
The figures are as follows: the price increased from 10-20, whilst QD had fallen from 10-5 units. Surely, it gives PED of -0.5. This suggests that D is price inelastic, hence TR should have increased. But it did not. Before the price was raised it equalled: 10×10=100 and after the rise in price: 20×5=100. It remained constant. Could you possibly explain why this has occurred? All textbooks say that TR should increase when P is raised and D is price inelastic. It should work for any numbers as we can draw a demand curve through these two points (whether a straight line or hyperbolic). Does this imply that if demand is price inelastic and P rises TR may EITHER increase or stay the same, or is there a much complicated answer?
Thank you!
hi i want to know the major causes of unemployment in Europe and why it increased day by day.
What do people mean by countries/society/financial implosion? What are the characteristics and examples? What are some possible causes and effects?
Weather india may proceed to ,as developed country in next fify year ?