(b) Discuss whether high profits and the dominant market share in the banking sector suggests that there should be more government intervention – either through windfall taxes or regulation of prices. (30) British banks are highly profitable. They made a combined profit of £42 bn in 2007. Despite effects of credit crunch, banks have seen …
Readers Question: Using the data and your own economic knowledge, evaluate the importance of rising productivity in bringing about an improvement in the UK balance of payment on the current account. Productivity is defined as output per worker or output per input. Rising productivity implies that the economy is becoming more competitive and will be …
A Common question at AS and A2 Level is to understand economic graphs and statistics. Look at the graph below and explain what happens to GDP at current prices between 1974-1983? Many students will answer – In this period GDP is falling. However, this is wrong. What is happening is that the growth rate is …
Readers Question: Can you please differentiate between the causes of once-off inflation and sustained inflation? A temporary period of inflation, also called one-off inflation, may be caused by: Temporary inflation in 2008 and 2011. Rising in tax rates. Suppose the chancellor announces a 10% rise in fuel duty. This means prices will rise. But, next …
Readers Question: Buying a new property in Montengro 215,000 Euros’s paid 30% at exchange 1.47 to pound August 2007 20% due in 2-3 months. 43 ,000 euros today exchange is bad news approx 1.23 to pound further 30% due around Nov -Dec 2008 20% on completion around April 2009 1.What are your predictions for the …
Readers Question: The Aussie dollar has appreciated strongly against the USD in recent times. Discuss the consequences of this rapid appreciation for Australia’s Balance of Payments? The Australian Dollar has appreciated against the US Dollar because Large US current account deficit Australia has benefited from rising commodity prices, commodities which Australia produces a lot of. …
Readers Question: when will oil run out? It is difficult to say. Firstly on the demand side, demand for oil is rising faster than many expected. This is largely being driven by rising growth in developing economies such as India and China. Today we consume an average of 85 million barrels daily. According to the …
Readers Question: What credit can the adoption of central bank independence take for the relative stability of the UK business cycle since 1997? The MPC, Bank of England, are responsible for setting interest rates and determining UK monetary policy. They seek to keep inflation close to the government’s target of CPI 2% +/-1 % Between …