Discuss the strengths and weaknesses of demand-side policies (fiscal and monetary policy)
Discuss the strengths and weaknesses of demand-side policies (fiscal and monetary policy) [18] Demand-side policies are a government's attempts to influence the level of growth of aggregate demand and hence the levels of employment, real GDP, inflation, growth and balance of payments position. A government will do this by using fiscal and monetary policies. Fiscal policies involve the use of government spending, taxation and borrowing to influence both the pattern of economic activity and also the level and growth of aggregate demand, output and employment. Monetary policies involve the use of interest rates to control the level and rate of growth of aggregate demand in the economy. Different types of demand-side policies can be used depending on the position of inflation in an economy. Reflationary demand-side policies seek to increase aggregate demand and raise the level of planned expenditure at or near the level of potential GDP. Deflationary demand-side policies decrease aggregate demand in the event of aggregate demand running ahead of aggregate supply and posing inflationary risks or leading to an unsustainable deficit on the balance of payments. An example of when reflationary demand-side policies would be used is when aggregate demand is too low, so for instance when taxes are high and interest rates are high. The policies that would be used in order to shift
Economics Report on Budget
ECONOMICS COURSEWORK "Everyone benefited from the budget of 2003" BEAL HIGH SCHOOL-13317 UMAR SHEIKH-2202-11GS Economics Report on Budget "Everyone benefited from the budget of 2003t". Introduction The aim of this report is to find out how budget 2003 has affected different groups of people. Has the budget benefited the UK? Does the majority of the UK know about budget? In this report I will find out the answers to these questions and produce a clear conclusion outlining the main factors included in budget 2003 and if it was a success or not. In this report I have to find out if budget 2003 benefited everyone or not. I will need to gather information from different angles to find if budget had an affect on the citizens of Britain. To complete my report I will under go primary and secondary research to find out as much as I can to find out about last years budget. I will apprehend research such as questionnaires, interviews, textbooks etc. My research will be limited as I cannot go through vast amounts of data such as economic journals, surveys and focus groups which are beyond my reach and so my conclusion will present limited amount of data. This report will be structured in a way that you will be able to follow it with simple economic jargon. In the beginning I will present information on budget and have an understanding of it thoroughly to show you that I
Commentary - California’s Energy Future Looks Dim
Commentary #02 Silvia Panico January 18, 2001 Section Covered: 02 Word Count: 446 Rene Sanchez and William Booth, (01/14/01), California's Energy Future looks Dim , Washington Post, A1-A18 CALIFORNIA'S ELECTRICAL MARKET About a week ago, the two main electric utilities of the state of California, came very close to call a state of bankruptcy, and were forced to leave most of the state without electricity. This bankruptcy was due to numerous factors. The first one was that the government had recently deregulated the electrical sector, but still kept in place retail price caps for the utility companies which delivered the power to homes and businesses. During the harsh winter, which also increased demand, the power generators had to raise their rates because of an increase in the resources' prices. This reflected on the utilities who couldn't increase their prices as they wanted, because they were restricted by the government. If we analyse
What was the focus of the social reform and why was this? Liberals of 1900
What was the focus of the social reform and why was this? The main focus of the social reform was aimed at the ill-treated children, the future of Britain. The liberals abandoned the old, traditional method of governing known as "laisser faire" and took on a more socialist stance. The Laisser Faire made the rich, richer and the poor, poorer. It was a system in which the government had previously thought that the poor were poverty stricken because they were lazy and could not save. However powerful evidence from Rowntree's survey suggested that this was not the case. Soldiers sent to the Boer war could not fight because of rickets and other side effects of malnutrition. Unemployment figures were increased due to foreign competition, this caused crime such as theft and prostitution and not only riots but also this was a loss to the economy. The economy suffered because workers could not produce much output, "The American worker is a stronger, larger, healthier, better fed and consequentially a more efficient animal" The government's response to this was a series of acts known as the social welfare reforms, which were first step towards improving general health, unemployment and ultimately the standard of living. This included the Workman's compensation act which required employers to pay compensation for injuries sustained at work from unsafe or unhealthy conditions.
Asses the extent to which the internet has made markets more competitive
The internet, created for access by the world's population approximately twenty years ago, has evolved exponentially to improve market competition among firms and businesses. Its uniqueness has come from its ability for easy use and freedom of information, though with these fundamental principles, other characteristics have brought us closer to a sense of perfect competition than ever before. Indeed, the internet is rapidly becoming a necessity rather than the luxury it once was. In theory, the internet should mean that every market works perfectly. However, even the internet provides detrimental effects, often different to those of conventional means such as typical market failure. The internet has been used to widen the customer base of particular businesses, creating greater profit margins than could ever have been imagined. This has been accentuated through the tactic of pricing internet-ordered goods and services cheaper than those on the high street. Consumers who may be disadvantaged due to disabilities, age, time constraints and so on are those who use the internet the most to buy. Previously, these people would have found it difficult to buy, but with the internet comes these frequent buyers. Even people who would have normally bought from high street shops would have the option of buying from the internet. Usually, a lot of people go out and buy things to socialise
Economics Article Analysis : Price controls amid anti-dumping probe
International Baccalaureate Economics Higher Level Inter Community School of Zurich Marc Fleming Extract Title: Price controls amid anti-dumping probe Source of Extract Bangkok Post www. Bangkokpost.com Extract date: Monday February 18 2002 Word Count: 447 Syllabus Links: 2 & 3 This article discusses how the Thai government implemented a price ceiling on various hot rolled still products because domestic firms were exploiting the situation of the imposed surcharges on imported steel. Price ceilings are a form of market intervention employed by governments to control price levels. They are also known maximum prices. A maximum price is a set physical limit of price, this meaning that the price of a given product may not exceed the set limit. Surcharges are a form of protectionism employed by the government; they are tariffs, which are placed on imported products to protect home markets. In the article, it is stated that various foreign companies were dumping their excess steel products into the Thai market. This means these imports were being sold at prices below that of production costs, putting local companies out of business. The Thai government decide to take action by taxing all imported steel. The diagram below illustrates how this works and what effects are. The tax increases the price of steel imports from p1 --> p2 what this does is increase the
marketing mix analysis
Main Aspects of Marketing Mix (100) The easiest way to understand the main aspects of marketing is through its more famous synonym of "4Ps of Marketing". The classification of four Ps of marketing was first introduced and suggested by McCarthy (1960), and includes marketing strategies of product, price, placement and promotion. The following diagram is helpful in determining the main ingredients of the four Ps in a marketing mix. Product In simpler terms, product includes all features and combination of goods and related services that a company offers to its customers. So the Airbusproduct includes its body parts such as the engine, nut bolts, seats, etc along with its after-sales services and all are included in the product development strategy of the Airbus. However, a serious criticism can be raised here in terms of how marketing mix analysis will cater for companies such as ABN Amro Bank, Natwest Bank, British Airways and Fedex Corporation as they don't possess tangible products. It was argued that is it feasible to omit service-oriented companies with the logic that the term "services" does not start with a "P", however, it was asserted that these companies can use the terminology of "service products" under marketing mix strategy making (Kotler & Armstrong, 2004). Lazer (1971) argued that product is the most important aspect of marketing mix for two main reasons.
What are the reasons for governments to own business and assets? Why has privatization of public enterprise taken place? Should public housing and airport in Hong Kong be privatized?
PA302 (2) CHAN Sau-fung (S05012153) What are the reasons for governments to own business and assets? Why has privatization of public enterprise taken place? Should public housing and airport in Hong Kong be privatized? Reasons for establishing public enterprise Governments have established public enterprises for a variety of reasons. These can include inadequate private supply of goods and services; rescuing private firms if their closure is against the public interest; improving competition; reducing social costs such as environmental externalities; even to protect national sovereignty in some way.1 In fact, there are ideological and practical reasons for maintaining public ownership, its rationale is as follows: ) Ideological consideration "Socialism" and "communism" are two modern ideologies for discussion of public ownership. Communism can be classified as one particular kind of socialism even though communist ideology differs very much from socialism. Socialists emphasis on the values of equality, social justice and cooperation while communist ideology is based on class struggle or hatred. However, both socialism and communism strongly reject the concept of privatization as it will create inequality and jeopardize social justice. They are in favor of the economic collective system, i.e. government and social ownership as the means of production and
What methods of intervention are open to UKgovernment to regulate private monopolies?
Economics Assignment II What methods of intervention are open to UK government to regulate private monopolies? The economies of scale can lead to monopoly also another form of imperfect competition It is often argued that monopolistic competition leads to a less efficient allocation of resources than perfect competition. The economies of scale are things which make it possible for bigger organisations or countries to produce goods and services, most of the time cheaper than the smaller organisations. Whereas the monopoly exists when there is only one firm in the industry, meaning a market situation with only one seller. Imperfect competition has limited amount of buyer, it can be called a monopolistic competition i.e. firms noticed that the price can charge is a decreasing function of the quantity it sells. Imperfect competition assumes that the sellers they do not seem to forecast the reactions of the individual competitors: this goes with the form of oligopoly. Monopoly is not always clear it really depends in how the industry is defined e.g. Courts has a monopoly on a certain type of fabric material, "The vast majority of firms in the real world operate under imperfect competition". To some extent, the boundaries of an industry are arbitrary, what is more important for firms is the amount of monopoly power it has, and that depends on the how close the substitutes
Study Source F and H. Use Sources F and H, and your own knowledge, to explain why the Jarrow Crusade took place
Study Source F and H. Use Sources F and H, and your own knowledge, to explain why the Jarrow Crusade took place In 1936, after they had already sent a number of deputations to the Board of Trade in London, Jarrow made one last effort to get them noticed. A march organised by the people of the town was made the 270 miles from Jarrow to London; its object to attract attention to the plight of the town, appealing for sympathy and help. There are many reasons, both long term and short term as to why the Jarrow Crusade took place as the problems they suffered grew so bad they thought the only way possible was to get help from the government. In the long term, the crusade happened because of the vast amount of unemployed men that was on the increase which had been caused by the extreme decline of old industries. When England moved back to the Gold Standard in 1925 after the First World War, the pound was fixed at a high value and a policy of free trade had been introduced. This made British goods very expensive to purchase abroad whereas foreign goods became much cheaper in Britain. The outcome was that foreign countries started selling pounds on international markets forcing the British government to buy them at high prices, resulting bankruptcy of the government in August 1931 when Britain's reserves of gold and foreign currencies ran out. During this time, America had
