The World Bank publishes several measures of global poverty, which measure poverty by different levels of income. The most common is the percentage of the population who live on less than $1.90 a day. This is a measure of absolute poverty. There are also measures of relative poverty which compare income against the national average. …
Readers Question: List and briefly describe the positive and negative attributes of multinational corporations (MNCs). Multinational corporations are large companies with operations in several countries across the world. For example, Apple, Ford, Coca-Cola, Alphabet (Google) and Microsoft. Their size and turnover can be greater than the total GDP of many developing economies. Benefits of Multinational …
The Human Development Index (HDI) is a measure of economic development and economic welfare. The Human Development Index examines three important criteria of economic development (life expectancy, education and income levels) and uses this to create an overall score between 0 and 1. 1 indicates a high level of economic development, 0 a very low …
Readers Question What does the size of a current account deficit / surplus say about the state of the economy? A current account deficit means that the value of goods and services imported is greater than the value of exports. A current account deficit requires capital / financial flows to finance this deficit. Despite the …
The domino effect refers to how one action can have a knock-on effect to related subjects. Knock one domino over, and you don’t just affect the first domino, but all the ones who stand in its path. In economics, the domino theory is often used to explain how an economic problem in one country can …
A look at how a Central Bank may act as lender of last resort to commercial banks and the government. A lender of last resort means if banks or the government are short of funds, the Central Bank will step into prevent illiquidity. This helps to maintain confidence in the banking sector. Lender of last …
Readers question: What is Austerity? Simple definition of Austerity Austerity involves policies to reduce government spending (or higher taxes) in order to try and reduce government budget deficits – during a period of weak economic growth. Austerity policies are often associated with higher unemployment and lower economic growth. Austerity policies (and automatic stablisers) have reduced …
Globalisation involves the increased integration and interdependence of the global economy. Since the 1960s, there has been an increased rate of globalisation, which has been characterised by rising trade, rising exports as % of GDP, greater movement of labour and capital, and an increased interdependence of the global economy. Globalisation has benefitted some countries more …