Oil prices hit two-year highs

Commentary #: 2 Name: Ana Merino Class: 11 St. Date: February 10th 2003 Word Count: 417 Title of Article: Oil prices hit two-year highs Source: BBC News Online 7/02/2003 Section of Syllabus: 1.2 Resource Allocation in the Market Commentary With the imminent attack on Iraq and the strikes in Venezuela, price of oil has gone up drastically. In these past months the price of oil has gone up due to various causes. One of the reasons is because of the cold winter in the US, stocks of heating oil and gasoline are falling heavily and fuel distributors are beginning to store supplies ahead of a possible war. This is another of the reasons why the price of oil is increasing. Many people think that the attacks on Iraq are forthcoming and the associated risk of unsettling supply has made the price of oil ascend. The third and not less important cause why oil has gone up so much is due to the recent strikes in Venezuela. Venezuela, the fifth largest oil exporter has undergone important strikes which have interrupted production and therefore the exports (the US imports 13% of its oil from Venezuela). The supply, which in economic terms is defined as the quantity of goods that sellers are prepared to sell at any given price over a period of time, has decreased in these few months because of the reasons mentioned above, this has caused the price of oil to increase. This can be seen

  • Word count: 474
  • Level: GCSE
  • Subject: Business Studies
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The Common Agricultural Policy (CAP)

The Common Agricultural Policy (CAP) . a. EU producer prices, between 1979 and 1982 fluctuated steadily, where it peaked at a price index of 160 in 1979 and slumped to 145 in 1980. Since 1983, where it peaked at 155, the price index has been steadily decreasing and still was in 1991 where the price index reached 105. World prices have fluctuated over the 13-year period. In 1979, the index price was 100, and 3 years later, it peaked at 115. Since then, it has gradually decreasing and in 1987, it slumped to under 60. It then peaked at a price index of under 80 in 1989, and has slowly been decreasing in 1991, where it reached 55. b. All cereals have showed the greatest relative decline in intervention stocks between 1985/6 and 1988/9. 2. a. EC producer prices might be higher than world market prices because firstly, due to the tariffs placed on imported agricultural products. This therefore pushed away these producers, and allowed EU farmers to push up their prices in the domestic market. There was also a high intervention price. A minimum fixed price that farmers had to sell their products at. b. c. Some countries, outside the EC may have suffered from the CAP because agriculture may have been a part of their economy. With the CAP in place it drove out competition from outside and hence, a big part of economic growth is lost. The countries unemployment levels

  • Word count: 470
  • Level: GCSE
  • Subject: Business Studies
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What do you expect to happen to happen to the demand for houses in the UK for the next 10 years?

What do you expect to happen to happen to the demand for houses in the UK for the next 10 years? The last decade has brought upon us one of the most memorable housing booms in British history. House values have reached record prices creating a false sense artificial wealth for many people and therefore leading many people into debt. The last year has shown a slow down in the inflation of housing prices; and in many areas a seemingly stagnant market. The debate surrounding the future of the UK housing market has been somewhat contradictory in the last few months. On the one hand, much of the information released this year by building societies such as Halifax and Nationwide, has revealed that property prices fell by 0.5% and 0.6% respectively in March, and that the annual rate of house price inflation fell below 10% for the first time in three years. On another hand, you've got the house builders, such as Westbury Homes, Wimpey and Taylor Woodrow, are claiming that the outlook for the UK housing market is a lot brighter than people think. Wimpey, reported recently that profits before tax during 2004 were up 19% to £450.7m, and announced that "visitor levels and interest have been encouraging, and reservations at the stronger end of our expectations". Many experts are now predicting a flood of new money into the buy-to-let sector of the property market which is due to the

  • Word count: 469
  • Level: GCSE
  • Subject: Business Studies
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External influences are factors that affect the business, which the business cannot control. There are many external influences that can affect a business.

External influences are factors that affect the business, which the business cannot control. There are many external influences that can affect a business, such as: Business Competitors Economic Conditions Environmental Constraints I will first discuss the competition faced by Errol Anderson Motors. Errol's main competitors are local garages and other well-known garages, such as Kwik-Fit. They compete on price and quality by providing a good service for a good price. Availability may be a problem for Errol, because Kwik-Fit would have more parts available because they are a national chain and have more money. So if people have a foreign car they would most likely go to a well-known garage to get it repaired, because they know they would have the parts. The main competitors of Tesco are Sainsburys and Asda. These 3 supermarkets compete on price by doing special offers such as 'buy one get one free' and offer discounts on certain products. Supermarkets such as Tesco and Asda are both national chains, but they are trying to expand worldwide which would make them a more powerful and profitable company. Errol Anderson Motors is a local business, but Errol's main competitor, Kwik-Fit, are a national chain, which gives them the edge over Errol as they are more well-known. For Errol to start competing with Kwik-Fit, he would first have to start importing more parts for less

  • Word count: 467
  • Level: GCSE
  • Subject: Business Studies
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Outline how consumer sovereignty determines patterns of production in an economy and discuss the factors that influence consumer choice.

Outline how consumer sovereignty determines patterns of production in an economy and discuss the factors that influence consumer choice. Consumer sovereignty is an economic term for the concept that, in a free market, consumers determine the goods that are produced; this makes them "sovereign" over production in an economy. The theory of consumer sovereignty says that, while businesses and companies can produce anything they choose, if consumers do not want or need a product, it will not sell. If a product is not sold, it will not continue to be produced. Therefore, buyers ultimately decide what is produced. Consumer sovereignty therefore is important in the role of determining patterns of production in an economy. Through the operation of consumer sovereignty, consumer income levels determine the types of production that occur. As an economy becomes more wealthy and income levels rise, demand for luxury good also rises as well as the production of luxury goods. Thus, as an economy experiences an upturn and consumer incomes rise, the production of luxury goods will increase. Similarly, the production of these items will decrease in economic downturn. There are four main factors that influence consumer choice. They are personal factors, economic factors, social factors, and marketing. Personal factors influencing consumer choice are about the consumer's own

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  • Level: GCSE
  • Subject: Business Studies
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The Difference Between Actual Growth and Potential Growth

David Pearce The Difference Between Actual Growth and Potential Growth There are two different types of economic growth, known as actual growth and potential growth. Actual growth is the percentage annual increase in national input: the rate of growth in actual output. When statistics on growth rates are published, it is actual growth they are referring to. Potential growth is the speed at which economy could grow. It is the percentage annual increase in the economy's capacity to produce: the rate of growth in potential output. Two of the major factors contributing to potential growth are: * An increase in resources - natural resources, labour or capital · An increase in the efficiency with which these resources are used, through advances in technology, improved labour skills or improved organisation. There will be an increase in space capacity and an increase in unemployment if the potential growth rate exceeds the actual growth rate. This will result in a growing gap between potential and actual output. To close this gap, the actual growth rate would temporarily have to exceed the potential growth rate. There are thus two major issues concerned with economic growth: the short-run issue of ensuring the actual growth is such as to keep actual output as close as possible to potential output; and the long-run issue of what determines the rate of

  • Word count: 414
  • Level: GCSE
  • Subject: Business Studies
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Topic: What are the advantages and disadvantages of the world

Topic: What are the advantages and disadvantages of the world "becoming smaller"? Thanks to the development of science and technology, the distance between countries seems to be narrowed. We can communicate or cooperate with people everywhere. That's why people say the world is becoming smaller. This tendency brings us more good chances for making relationships and business, yet, it also causes some drawbacks like losing traditions or unsteady economic condition. In the past, it was impossible for a man living in Vietnam to keep contact with his relatives in America. But nowadays, with computers and telephones, we can not only talk with others but also see their lively images through any distance. Besides, we can also make friends with people from different places on this earth if we are interested in. By car, train or plane... we can travel around and discover all the remote corners of this globe, which helps enrich our knowledge about countries and people all over the world each day and the relationship between humanbeings become closer than ever. To businessmen, this tendency brings them alots of benefits. First of all, they can spread their market, in other words, they will have more customers, which means they can get more money. Second, they can use cheaper labour source and meterials in less developed countries to reduce the manufacturing cost. Third, because of

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  • Level: GCSE
  • Subject: Business Studies
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Slatterys is one of many businesses that are affected by the exchange rate, in various different ways. Exchange rates can influence the amount of money, Slatterys has to spend on overseas imports.

Exchange Rates & Slatterys Like most businesses, Slatterys is one of many businesses that are affected by the exchange rate, in various different ways. Exchange rates can influence the amount of money, Slatterys has to spend on overseas imports. As Slatterys is a high-class chocolatier, one of the major organic ingredients needed to make chocolate are cocoa beans which Slatterys have to import from different countries abroad, mainly hot countries because cocoa beans only grow in certain climate, like Africa. Due to this factor, Slatterys have to import cocoa beans from abroad. However, the exchange rate can determine if Slatterys gains or losses money, e.g. if the pound (£) was strong against the South African Rand (R) this would make it cheaper for Slatterys to buy cocoa beans, however, if the pound was weak against the South African Rand (R), this would make the cocoa beans more expensive. Slatterys also offer a different form of cocoa beans, which are chip cocoa beans. Due to this Slatterys have to import chip cocoa beans, from other countries from abroad, the main country being Belgium, which has a different currency than England, therefore, Slatterys have to exchange the pound (£) into the Euro (€). Another essential item that Slatterys needs are chocolate moulds, which make it possible for Slatterys to customize their chocolate in to various different shapes

  • Word count: 384
  • Level: GCSE
  • Subject: Business Studies
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Explain how economists model how an increase in government expenditure can lead to a greater increase in national income.

Explain how economists model how an increase in government expenditure can lead to a greater increase in national income. Ans. National income is the total amount of wealth that accrues to the permanent residents of a country as a result of the production of goods and services within a country during the course of a year. It is important to measure national income because it shows whether the standard of living in a country is rising or falling and it can be used as a means of comparison between other countries. It is also useful to measure income against past income in the same country to see whether the economy is growing or declining. An increase in government expenditure is an injection in the circular flow on income. An injection is an addition to the circular flow of income. The diagram above illustrates some of the injections and leakages in the economy. It is however very important to find out exactly what will be the effect on the economy from an increase in injections. Economists do this by calculating the multiplier effect of the increase in the government expenditure on the economy. The multiplier indicates how many times that the injection of original spending circulates through a local economy. As a result of re-spending, it benefits the local people. The formula for calculating the multiplier effect is 1/(1-MPC). When there is an increase in the

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  • Level: GCSE
  • Subject: Business Studies
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The economic boom (the period of economic prosperity typically placed between 1921-1929) was caused by an expansion in industry, which led to more jobs and an increase in disposable income.

The economic boom (the period of economic prosperity typically placed between 1921-1929) was caused by an expansion in industry, which led to more jobs and an increase in disposable income. Many changes took place in the 1920's. Growth of mass production in industry, technological advances, and the increasing efficiency of labor boasted a gain in industrial production by over 60%. Because of this prosperous economy, the wealth of a typical family skyrocketed and led to the consumption of more consumer products. As a result of an improvement in three factors of production (machines, factories, and standardized mass production), national personal income rose dramatically, wages were up, workdays and workweeks were shorter, industrial production doubled, and there was a steady expansion of economic growth. A new name was given to the decade of the 1920's to reflect the prosperity and the new opportunity presented in the aftermath of World War I. Under president Warren G. Harding, , who urged a "return to normalcy" after the war, many conservative policies (especially regarding taxes, tariffs, immigration restriction, labor rights, and business regulation) shaped the face of the post-war world. Marked by corruption and scandal, Harding's administration lasted until his death from a stroke in August, 1923. While doing little as Harding's vice president, Calvin Coolidge

  • Word count: 362
  • Level: GCSE
  • Subject: Business Studies
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