Definition of Frictional Unemployment This is unemployment that occurs from the inevitable time delays in finding new employment in a free market. It may also be called ‘search unemployment’ as it relates to the time taken to search for new employment. For example, if you graduate from university, you can’t necessarily expect to find …
GDP is gross domestic product – it is a measure of the total value of what is produced in an economy GNP is gross national product – a measure of the total income that stays in an economy. The difference is that GNP takes into account the net income flows (e.g. dividends) that are sent …
The concept of hidden taxes is that taxpayers may remain unaware that they are paying the tax because it is included in the price and the tax is not visible. Examples of hidden taxes include Indirect taxes – VAT, sales tax, excise duty, Insurance tax, air passenger duty. Corporation tax – a tax on company …
Hit and run competition occurs when a firm temporarily enters a market and then leaves when supernormal profits are exhausted. Hit and run competition is considered to be a feature of a contestable market. A contestable market has low barriers to entry and exit. Therefore, if firms in the industry are making supernormal profits, there …
Horizontal integration occurs when there is a merger between two firms in the same industry operating at the same stage of production. For example, if two newspapers like the Independent and the Guardian merged, this would be a horizontal integration. Horizontal integration is different to vertical integration which occurs when firms at different stages of …
Definition – Hot money flows refer to capital flows moving to countries with higher interest rates and/or expected changes in exchange rates. Example of hot money flows For international investors, there are substantial gains to be made from moving money between different countries with different interest rates. Suppose the EU and UK both have an …
What factors enable a firm to grow in size? Internal expansion When a firm increases size through increasing production and sales. External expansion – When the firm grows through a merger with another firm. Internal expansion can involve Cutting price to increase sales and gain more market share. This may make the firm less profitable …
A billion means: 1,000 million = 1,000,000,000. In 2017 In dollars, a billion Pounds is the equivalent of $1,350,000,000 In Euros, a billion pounds is currently: €1,120,000,000 Examples of billion In August 2017, UK public sector net debt was £1,773 billion equivalent to 88% of UK GDP In 2015/16 the UK government is forecast to …