"Government spending is the enemy of employment in two ways. First government borrowing is inflationary which destroys confidence in the private sector. Secondly, government expenditure "crowds out" private expenditure" Discuss.
"Government spending is the enemy of employment in two ways. First government borrowing is inflationary which destroys confidence in the private sector. Secondly, government expenditure "crowds out" private expenditure" Discuss. Government borrowing can be inflationary because the government borrows from banks, which increases the money supply. Banks assume that consumers will not take more than 10% of their savings out and on that basis are able to lend to the government. This increases the money supply because the government has borrowed from the bank but the consumer's savings stay the same and therefore there is more money in circulation. According to monetarist beliefs an increase in the money supply will directly increase inflation. Inflation can lead to unemployment, as people demand less due to higher prices and therefore demand for labour maybe decreased. Inflation also creates uncertainty for entrepreneurs, cost curves increase and revenue can decrease thus squeezing profits. Also when inflation is in the mind of the entrepreneur it can escalate easily as they will take inflationary actions like automatically increase prices and therefore it is imperative government spending/borrowing is controlled. Although government borrowing does increase the money supply, the monetarist view of a direct link between money supply and inflation is wrong, as proved when Britain
"Imperial reform in the 19th century was primarily motivated by economic factors." How accurate a description is this, with reference to the changes made in the administration of the British Empire, 1815 to 1870? The period 1815 to 1870 was characterized by radical change in the character of the British Empire, to the extent that, by the end of the period, the empire consisted of two distinct parts: one made up of 'dependent' colonies, experiencing direct formal rule; and the other made up of self-governing 'settlement' colonies. This development occurred as a result of a series of social, political and economic reforms. In order to judge whether economic factors dominated imperial reform during this period, an assessment of the causes and nature of reforms is necessary. However, while imperial reform was multicausal, great weight can be given to the argument that underlying economic factors which stimulated initial social reform and change, which in turn propagated political reform. One of the earliest reforms was the dismantling of the slave system, initiated by Britain in 1807 through the end to British involvement in the transatlantic slave trade, and again in 1834 through the abolition of colonial slavery. The abolition can be seen as a result of a combination of economic, social and political factors. The economic decline of the British Caribbean and other regions,
"Globalisation Is A Force For Good, Any Faults Lie With the Actions Of The Global North", Discuss. The question is globalisation a force for good or bad has been looked at for a long period of time, focusing on the international economic system. Globalisation is an area of politics that has been very difficult to define as the term means many different things to many different people for example the term would be defined differently between activists against globalisation and people who are very much for globalisation. In this essay I will be looking at the pros and cons or globalisation, and will also be looking at the influence and the problems of major NGO's A definition of globalisation from English theorist Anthony Giddons is: "Globalisation can thus be defined as the intensification of worldwide social relations, which link distant localities in such a way that local events are shaped by events occurring many miles away and vice versa"1 An academic from Holland called Rudd Lubbers defines globalisation as: "a process in which geographic distance becomes a factor of diminishing importance in the establishment and maintenance of cross border economic, political and socio-cultural relations"2 For this essay globalisation will be the increased mobility of goods, services, labour, technology and capital around the globe through capitalism. The pro-globalisation
"Italy remained poor and backward despite all of Mussolini's Attempts to promote economic growth" Mussolini had inherited an Italy with limited resources. The industrialisation of the north and modernisation of agriculture left the south behind with its mass poverty and lack of education. Mussolini believed in will power as a driving force in society. The battle for the lira, grain and marshes were used to mobilise the Italian people who struggled to achieve these targets. In 1926 Mussolini engaged in the Battle for the Lira. In October 1922, the lira was fixed at 90 to the pound and had been falling rapidly since. The economy was deflated to drive up the value of the lira, however this drove up the price of Italian exports seriously harming the economy. Small firms were taken over by larger ones. This serious deflation caused government imposed wage cuts of 20%. The battles' good intention of returning economic stability was a lost cause that forced the government to devalue the lira in 1936. The battle for grain in 1925 aimed to promote economic growth with autarky to reduce the need for grain imports and make Italy more independent. To make this possible high tariffs were imposed on imported grain and government grants were made available to farmers for machinery and fertiliser. Although cereal production doubled other forms of agriculture were hard hit, which raised
LAW 410 ASSIGNMENT 2 Suggested Topic #25 "Legal control of multinational corporations: problems and prospects" The greatest evil is not now done in those sordid "dens of crime" that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried and minuted) in clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails, and smooth-shaven cheeks who do not need to raise their voices. (C.S. Lewis, The Screwtape Letters) As the name "Multinational" suggests, today's corporate giants are no longer shackled by the constraints of international borders. Previously the bulk of world production occurred within national boundaries, but in recent decades trade and production has become increasingly globalised, and corporate activity has diversified and multiplied. The market is now global, as is capacity for production. Legal and political framework is traditionally based on the nation state, however economic activity is no longer such, and it is this mobility of capital that threatens to undermine the power of national governments to deal with traditional economic and social issues1. Critics charge that the ability of multinationals to manage production on a global scale and leap national borders in search of lower costs and
"Liverpool's slave trade was the centre of a global commerce and an important factor in British economic growth." To what extent would you agree with this opinion?
Part B -"Liverpool's slave trade was the centre of a global commerce and an important factor in British economic growth." To what extent would you agree with this opinion? This essay will attempt to answer the question by approaching it in three stages. Firstly it will assess the importance of Britain's slave trade in the context of global commerce, especially during the 18th century. Secondly it will attempt to show the degree of significance - and the reason - for Liverpool's involvement as a British port, and thirdly, to find out whether or not this had a bearing on Britain's economy in general. In other words, the essay will attempt to ascertain whether Britain's slave trade "was the centre of a global commerce", and whether Liverpool was, in turn, the central city for that particular trade. From around 1600, Britain had colonised or conquered a network of territories all over the world including parts of the Americas - According to Professor Kenneth Morgan, "By 1797-8, North America and the West Indies received 57 per cent of British exports, and supplied 32 per cent of imports"1. The 18th century saw Britain rise to an undisputed dominant position among her rival European powers. Trade with these overseas colonies was a driving force behind the Industrial Revolution, especially throughout the 19th Century, in providing sources of raw materials and markets for finished
"Low pay is directly related to low productivity." Discuss. Suggested answer : Wages are the reward for labour and is determined by the Marginal Revenue Productivity Theory in a perfectly competitive labour market. According to the Marginal Revenue Productivity Theory, marginal revenue product is the product of the marginal physical product and the marginal revenue, i.e MRP = MPP x MR. In a perfectly competitive labour market, the marginal revenue productivity curve is downward sloping and relates the quantity of labour employed to its wages, hence it is also the demand curve for labour. As all firms are price takers, thus at equilibrium, according to the theory, profit-maximising firms will employ up to the point where MRP is equal to the wages paid (since marginal factor cost = average factor cost.) Low pay is partly due to low productivity, but it can also be due to many other reasons, like the difference in the marginal revenue of the final good produced with labour, supply reasons or market imperfections. Hence low pay is related to low productivity but only partly and not all the time. Generally, when demand is high (D1), wages received are high (W1) and when demand is low (D2), wages are low (D2) as shown below. Hence, low wages can be due to low demand, (MRP) which in turn is due to low productivity (MPP) and/or low prices (MR) of the final product.
"Machine breaking and strike action were characteristic of unruly and undisciplined Labourers" Violence, protest and machine breaking were all characteristic of the late 18th and early 19th century. Employers seeking to make more off less, drove down workers wages with the more widespread use of machines, such as the gig mill. After failed attempts at lawfully seeking and upholding statutes which protected the outworking system from newly mechanised 'factory' industry, where products were of a lesser quality, the workers were left with little choice but to resist with violence. This happened at a time when bad harvests had caused an acute increase in food prices, and foreign wars had damaged foreign trade. Not only did they resent this tide of cheaper, faster and less-skilled change, but also to the greater shift in change to 'Laissez-faire' capitalism which left them completely unprotected. Although the assumption that the act of deliberate wrecking of industrial machines was born with the Luddites, this is not the case, moreover the assumption that these violent outbursts were committed by the un-skilled lower class 'mob' are also untrue. This Luddite myth is one that needs addressing, as it has fallen into lore. However it can not be ignored that the violence did sometimes escalate out of control (ending in death) yet this serves to
Outline the main argument for and against creating a smoking ban in public areas. Is it good overall - justify your view Smoking is a de-merit good. This means that it is over-provided in a free market economy. The price mechanism has allocated too many resources than is socially desirable. Smoking is over consumed, as shown in the diagram below: The MSC (marginal social cost) and the MPC (marginal private cost) are not the same. They diverge. This is because society experiences a different cost from the good being consumed than the individual. The demand side is the same hence why MSB = MPB. The individual is happy when MPB = MPC, (10 a day). Therefore they consume where the red and green lines meet. Here their MPC = MSB so they are happy. Society is happy when MSB = MSC. So they want people to consume where the pink lines meets the green line. MSB = MSC (5 a day). Below 5 a day both the MSC and MPC are below MPB and MSB. So both society and the individual wants to consume the good. Above 10 a day the MSC and the MPC are above the MSB and the MPB so neither the individual or society wants more than 10 cigarettes a day. However in between 5 and 10 cigarettes a day, the MSC is above the MSB so society does not want to have that many cigarettes. The MPB is still above the MPC so the individual does want to have 6 to 10 cigarettes but society does not want them to. It can
" Discuss the argument that privatisation and deregulation of electricity supply in a number of advanced economies has led to an unusually high number of blackouts in the recent period."
Introduction to Economic Analysis (Micro) Essay Question - Autumn 2003 " Discuss the argument that privatisation and deregulation of electricity supply in a number of advanced economies has led to an unusually high number of blackouts in the recent period." As we have seen over the last few years in the world's leading countries, e.g. Britain, USA, and other European countries have faced the problem of blackouts which caused chaos in many regions of the country. There are several reasons which caused the recent blackouts - Privatisation and deregulation are among the reasons why recently blackouts have occurred. Thus, we will be looking at the structure of the market and why the electricity supply are differ during the state owned and after privatisation in terms of the cost structure of the market, and other factors which have an affect on post - privatisation market. The cost structure we are likely to find in the provision of electricity is what we called a "Natural monopoly" . By the term natural monopoly, means that a firm becomes dominant in the market resulting from another firm in the industry is not large enough to reduce their average cost to minimum while the average cost of natural monopoly firm keep falling as