Readers Question: What economic factors should I consider if I want to know the relationship between innovation and the presence of patents/copyrights? Do copyright/patents (generally Intellectual Property Rights) stifle innovation? Does it slow down economic growth? There is some debate. But, one argument is that patents are necessary to encourage innovation. If firms were unable …
(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: This one is about flexibility in the labour market. I am wondering why globalisation has made a contribution to the increase in flexibility. Is it because firms face fierce competition so they have to hire workers only when they need them? Increased competition is certainly one factor. If a firm has a domestic …
Readers question: Should the Government intervene to deal with the problem of Oil Shortages or is it better to leave it to a free market? As oil runs out, supply will shift to the left and the price will increase. Because demand is inelastic, oil firms will make increased profits. This creates an incentive for …
Readers Question: It’s not a good question, but I’ll ask it. Could you explain the differences between Research and Development and innovation? Research and Development involves investment in discovering new technology and increasing capacity of a firm. It could involve technological innovation or improvements in human capital. It usually requires a willingness to forego current …
The economic performance of a UK Construction PLC will be affected by many factors, including the role of government, exchange rates and inflation. Discuss The construction industry tends to be a quite volatile sector of the economy. Investment spending in construction has a strong correlation to the rate of economic growth and future prospects. When …
The impact of government borrowing on industry. Generally, government borrowing of over 3% of GDP and National Debt of over 60% of GDP is considered to be harmful and if government debt is too high it might start to deter foreign investment. Budget balance This is the amount the government need to borrow from the …
Readers Question:. (i) On 1 March, AUD1 = GBP 0.42. On 1 July, AUD1 = GBP 0.45. Your company exports native flowers to British florists. You signed a contract on March 1 to sell 10 tonnes of flowers at AUD 385 per tonne, to be delivered on July 1. Explain how the exchange rate movement …