Readers Question: how does a current account surplus affect domestic employment? A current account surplus means an economy is exporting a greater value of goods and services than it is importing. A country with a current account surplus will have a deficit on the financial/capital account. i.e. a country with a current account surplus will …
Readers Question: what does AD stand for in economic terms? AD = Aggregate Demand – the total planned expenditure in an economy. Aggregate Demand is composed of various factors C, I, G, X – M C= Consumer spending I = Investment (Gross Fixed Capital Formation) G= Government Spending X= Exports M= Imports AD places a …
Definition: Money is an object used as a medium of exchange between two parties. It can have intrinsic value like gold or it can be a universally accepted instrument such as notes and coins printed by a Central Bank. Early money These gold coins are an example of money with an intrinsic value. Made out …
Financialisation is a term used to describe the increased role of the financial sector in a modern economy. Source: NYT 2013 Financialisation also refers to particular trends in the financial sector of the economy. This includes: Increased use of financial intermediaries Increased use of futures markets. For example future contracts for bonds, shares, currencies and …
For the past 40 years, China has been one of the strongest performing economies – transforming itself from a developing economy to an unprecedented level of prosperity. However, in recent years, there have been concerns the rapid rate of growth in China is beginning to slow down and over the next few years, economic challenges …
A look at some arguments for and against public/private healthcare provision. Should healthcare be left to the free market or should the government provide universal healthcare? Arguments for Public Health Care Healthcare is not a profit maximising industry. Doctors and nurses don’t need financial incentives to do a good job but are motivated by aims …
Perfect competition is a market structure with: Freedom of entry and exit Perfect information/knowledge Many firms The price is set by the industry supply and demand. Firms are price takers; this means their demand curve is perfectly elastic. If they set a higher price, nobody would buy because of perfect knowledge. Therefore firms have an …
Readers Question I would like to know the full explanation of Expansionary Discretionary fiscal policy and its effects on the economy. Fiscal Policy is changing the governments budget to influence aggregate demand. i.e. changing taxes and spending. Discretionary fiscal policy means the government make changes to tax rates and or levels of government spending. For …