A business has a variety of potential objectives from profit maximisation to cultivating good relationships with various business stakeholders. Economic theory often assumes that firms are rational profit maximisers. However, in the real world, there are many other objectives that a firm can pursue. Business Objectives of firmsWatch this video on YouTube Profit Maximisation. The …
Technological unemployment occurs when the adoption of new technology causes job losses. Automation is a process of using robots, AI and machines to take the place of workers – not just in manufacturing, but increasingly new avenues – even in the service sector. The pace of automation is causing job disruption – with workers – …
Since the 1970s, we have seen a fall in average global inflation rates. There have been periods of inflation (often due to rise in oil prices), but the overall trend has seen much lower inflation rates. In the 1970s, inflation was seen as one of the main macro-economic challenges, but now many feel the challenge …
A high wage economy is characterised by high average incomes, rising real wages and fair distribution of income so the lowest income deciles are well paid. In summary, high wage economies tend to be characterised by high economic growth, rising labour productivity, high levels of education and training and good labour protections. (e.g. trade unions …
Panic buying – is it rational or irrational Panic buying is a situation where consumers buy an unusually large quantity of a good in anticipation of coming uncertainty. A related concept is ‘surge buying’ where people buy more than usual for rational reasons. Reasons for panic buying could include Health crisis which causes people to …
In the past few decades, there has been a dramatic decline in global birth rates, with many developed economies seeing their birth rate fall well below the ‘replacement ratio’ of 2.1 – meaning that their population will be set to decline in future years. Italy gives a stark warning of the impact of a low …
International trade between different countries is an important factor in raising living standards, providing employment and enabling consumers to enjoy a greater variety of goods. International trade has occurred since the earliest civilisations began trading, but in recent years international trade has become increasingly important with a larger share of GDP devoted to exports and …
Readers Question: What is the difference between growth and development? Can a country experience economic growth without development? In summary Economic growth means an increase in real national income / national output. Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. Ceteris paribus, …