Economics Q + A – 6

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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.

  1. Please don’t ask me to do your coursework / assignment e.t.c.
  2. Please don’t ask any maths calculations.
  3. The question and answer will be published here where everyone can see it (including your teacher).
  4. 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.
  5. I am looking to explain economic principles / ideas/ recent developments in economics.
  6. 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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448 thoughts on “Economics Q + A – 6”

  1. If the central bank reduces the supply of loans to commercial banks, what is the effect on the reserves held by commercial banks at the central bank?

  2. Can you please differentiate between micro econimics and macro economics?. I am a IGCSE O’Level student.

    • micro economics deals with the economy surrounding a single business entity like economies of scale and all whereas macro economics deals with the whole economic system of a country like gvt policies, inflation, interest rates, employment, GDP, GNP and so on

  4. Hi,

    I was just wondering what your opinion was on inflation targeting and exchange rates.

    It is my understanding that targeting takes precedent over more tangible (and important) factors such as unemployment, growth and balance of payments (imports keep a lid on inflation and helped create Britains ‘NICE’ decade). You can understand this as the threat of stagflation of return is very real and visceral.

    However with ‘free’ floating international exchange rates I question targeting’s relevance. Exchange rates reflect the competitiveness of a country and although there are obviously countless other problems associated with inflation as long as exchange rates respond to any changes in the price level a countries trade balance should not be adversely.

    What is your opinion on the relationship between exchange rates and inflation and whether this is natural market reaction could stem future inflationary problems?

    Thanks for your help, I complete my A2 this year and hope to aim for an A* with your site!

    Cheers,
    George

  7. Richard Drayton, the Professor of Imperial History at Kings College London, says in a letter to the London Review of Books:

    “What is clear is that in May 2010 the percentage of UK GDP which went to servicing debt, even after the impact of the 2008 crisis, was, at 2.5 per cent, at the lowest level enjoyed by any Conservative government since Lord Salisbury was at the Treasury in 1900.”

    http://www.lrb.co.uk/v35/n02/letters

    Is he right?

  8. I m Y9 student in international school, next year I have to start my IGCSE. My school forces us to choose between economics and business studies. My dad cheers for business studies (because he runs business), however I m still hesitate what subject to choose.
    If I learn economics, in the future what occupation can i take? is it true that Unis prefers students who take economics rather than business studies? Which subject is used in real life? Which subject is benefit in real life?

    I m extremely anxious with the choices! :'(

    • I m Y9 student in international school, next year I have to start my IGCSE. My school forces us to choose between economics and business studies. My dad cheers for business studies (because he runs business), however I m still hesitate what subject to choose.
      If I learn economics, in the future what occupation can i take? ‘

      Pretty much anything you want.

      is it true that Unis prefers students who take economics rather than business studies?

      Yes, I’ve heard that, not sure how true it is. But, generally economics seen as slightly more academic.

      Which subject is used in real life?

      both

      Which subject is benefit in real life?

      both

      I m extremely anxious with the choices! :’(

      Don’t be. It doesn’t make a huge difference. I’d say choose the subject which interests you the most, if you don’t know which subjet to do, just do economics!

      https://www.economicshelp.org/blog/wp-admin/post.php?post=653&action=edit

  9. I was just wondering if i’m a student taking CIE for Economics, is CIE’s syllabus and marking scheme compatible with the AS model essay that i’m planning to purchase? Due to the fact that it might be AQA or Edexcel?

  11. Can you please tell me if there is a relation between a prosperous economy and a large number of occupations
    Like in the Indus Valley civilisation, they say that we can tell that they had a prosperous economy because they had a large number of occupations
    Is there any economic logic to that or is the logic off?

  12. Greetings ,
    I am struggling to find a breakdown of the U.K’s external debt.
    I have came across many percentage charts etc but no detailed Breakdown of this.
    Could you advise me on whre to access this information please .
    Many thanks Kerry-Anne Karlsson

  13. What could be the reasons for some countries not having much success with the use of policy tools in boosting economies and human development

  15. Why can’t central banks guarantee all bank deposits, instead of just having deposit insurance with deposits guaranteed up till a certain amount only?

    The cost of doing so will be minimal since they can print unlimited amounts, or just credit the accounts easily.

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