Economic involves the production, exchange, and consumption of products and services. It focuses on how individuals use available resources to fulfill their needs and desires. The interaction of individuals in markets is another aspect of economics.
Economics permeates every aspect of our lives. Economics affects everything from the food we eat to the clothes we wear. It determines how much money we have in our bank accounts and how much we pay in taxes. Economics even influences how we spend our leisure time. Because economics is such an important part of our lives, it is essential to learn about it.
Economics can be studied at many levels, from introductory courses that teach the basics of economic principles to more advanced lessons focusing on specific financial concepts and theories. There are many resources to help you learn about economics, including books, articles, lectures, discussions, and free essay examples.
Introduction The decade of the 1970s was one marred with inflation in the United States. On average, the inflation rate during this period was capped at 6.8%, which was triple the rate recorded in the previous two decades and double the long-run historical wage (Bredin and Fountas 147). Moreover, the...
This article states that in the economy, there is a bad tendency to use collected data from a small window of time to understand economic experiences. It says that instead of using a small time window dating back to 1980 to understand these experiences, the window should be extended to...
Introduction Growth is a term that is used to describe the general positive nature of active facets of a society. In economic terms it’s categorized as either actual or potential. Economic growth refers to the steady increase in the GNP/GDP that is normally measured annually. Okun, (1962) says, “It provides...
The contrast between partnership and adversarial relationship is described below from several views. When the economy scale is not considered an adversarial relationship, it is used. There might be a lower switching cost, or competitiveness is poor. But to gain economy of scale, the partnership is used. This helps to...
There are three possible ways to achieve higher productivity in comparison with free trade equilibrium in a small importing economy. The methods include imposing import tariffs, import quotas, and voluntary export restrictions (VERs). As for the ranking, it is preferable to use import tariffs, then import quotas, and then VERs....
Macroeconomics is best described as the study of the world’s economy as it considers and analyzes large-scale financial relations, general process and patterns of economic behaviour. Macroeconomics also studies the mechanisms of activity and interdependence of countries, regions, and large non-state actors in the global economy. Explanation: The entire science...
Four factors of production are labor, capital, land, and entrepreneurship. The importance of them is founded on their contribution to the production process, economic growth, and competitiveness. Explanation: Economics is an essential power that has been directing people throughout history. Humanity faced a plethora of hardships, crises, and obstacles that...
The role and form of government intervention in international business are subjective because different countries operate their economies successfully with varying levels of government involvement in business affairs. For example, in America and many western countries, government involvement in business is kept at a minimum because of the belief in...
According to Optimal Currency Area Theory, a range of criteria exists intended to determine the conditions under which monetary union is desirable and highly likely to have a positive effect. The theory was established by Canadian economist Robert Mundell, who published his reflections in this regard in 1961. He proposed...
The development of the global economy since the seventeenth century has passed several stages. It includes the growth of international trade, the emergence of the capitalist system, and the split of the economy into socialism and capitalism. The relation of the global economy to political and social struggles is manifested...
Gross Domestic Product (GDP) is a key government statistic, which measures the total economic activity of the United Arab Emirates (UAE) as a country. It refers to the sum of all products and services the country produces within a single financial year. An increase in GDP indicates significant improvements in...
I believe that the best tool for the UAE is economic diversification because of various reasons. Firstly, despite making significant steps towards a diversified economy, the UAE has used a largely conservative approach in the past two years. As a result, the nation has not seen the best diversification yet....
The concept of an international firm has evolved considerably in the course of history. For instance, one can speak about the era of mercantilism that spanned from the sixteenth to the eighteenth century. In this case, much attention should be paid to the role played by chartered trading companies. In...
Leontief’s paradox can be explained by the skills-based approach. In particular, in the early fifties, the United States exported labour-intensive goods because the productivity of American workers could be much higher than in other regions of the world, even in Europe. Therefore, American labour-intensive products were more competitive in terms...
The Transatlantic Trade and Investment Partnership (TTIP) refers to a trade agreement between the U.S. and the European Union. It aims at promoting trade and international economic growth, strengthening the relationship between the U.S. and the EU, and increase jobs. However, the negotiations on the TTIP have entered a complicated...
The distribution of total fertility rate and gross national income in both countries with the highest TFR and lowest TFR appear to have a negative relationship. The scatter plot and trend line confirm that the total fertility rate and gross national income per capita have a significant negative relationship in...
Corruption occurs as a result of poverty in the whole world. Corruption occurs at all ranks of the society from the businesses, the government, the judiciary, and the civil society. The poorest are the most affected by corruption may they be in rich or poor economies. All elements of the...
The eBay started by first establishing a firm home business before joining international markets. The eBay took a longer time operating locally before launching its markets internationally. This affected the business negatively as it was not able to launch its business to some places such as Japan on time. This...
Full employment refers to an economic condition where everyone can find work and get employed. There is no shortage of labor resources, and they are used efficiently in all sectors of the economy, which means that both skilled and unskilled workers can get work. It also implies that everyone who...
AUSFTA was signed in 2004 between the Howard government of Australia and the United States of America. It was a kind of bi-lateral free trade treaty for ensuring conducting of trade smoothly between these two countries. With the continuous efforts of Australia to soothe the setbacks from GATT and other...
The devastating effects of COVID-19 have overburdened the less developed and developing economies, making it challenging to cover their debts. The G-20 established a debt relief framework to help these countries deal with the pandemic. The actors agreed that an eight-month debt suspension period would be offered to states with...
The main idea is that the monopolist normally charges high prices from consumers under normal circumstances, especially from customers who have a high willingness to buy, but occasionally, the monopolist may reduce prices for one day, and the consumer buying would naturally increase prices, the next day. It is believed...
Keynes and Friedman are a bit similar to one another owing to their interests in monetary theory, interventions, and the general way that economies operate. On top of the latter, these two economists were responsible for introducing relatively new and bold ways of looking at macroeconomics hence their recognition both...
According to NCB, the export sector is the main driving force of the economy as the export increased by 6.7% in 2010, in which the Irish exporters association based the growth of exports to the United States by 18%, Germany by 42% and to Canada by 27%. In addition, competitiveness...
There are two categories of methods of calculating the depreciation of assets. These groups are referred to as time factor methods of depreciation and use factor methods of depreciation. Both groups of methods differ from each other in many ways. These differences are discussed in the following. Time factor methods...
Demand is defined as the entire demand for a product or a service. A demand curve is a graphical diagram that illustrates the relationship between the price of different commodities or services and the amount that will be purchased. Ordinarily the demand curve slopes downwards, that is from left to...
There are numerous issues that an organization can experience with regard to the cost of various products. First, organizations find it hard to determine the level of credit attributable to a product because of the compensation given to employees involved in the production process. This challenge involves the need to...
A stock exchange plays various crucial roles and functions that influence the economy in a significant manner. First, it facilitates the regulation of the buying and selling of shares, bonds and securities. A stock exchange defines policies that facilitate fair trading practices and ensures that the activities of its various...
“Global city is a relatively new phenomenon that has been generated in the present period by the development of an all-encompassing world system that is termed as late capitalism, post-industrialism, or the informational age.” The characteristics of global cities include expansion of marketing system through internalization of commerce and technological...
Marshall had the fear that mathematical concepts were more likely to become the Ricardian vice. He warned that while mathematics is good, mathematical economics and mathematical theory were not likely to yield good economics. He argued that mathematical methods were only a good tool if it was to be used...
There is no denying the importance of the fact that Australia’s merchandise trade is differentiated by regional parameters. It should be noted that among the leading trade partners are the majority of developed and developing countries of East Asia and the Asia Pacific, such as China, Japan, Korea and New...
Americans are obviously not happy about the ever-increasing price they have to pay for gasoline. Therefore, many are advocating that the solution lays in the government enforcing price controls for the price increase is due to the company’s greed. There are disadvantages and advantages of price control on gasoline. To...
Currently, Rashid Enterprise is willing to receive payment in British pounds for the monthly exports it sends to the UK. While all of its receivables are denominated in pounds, it has no payables in pounds or in any other foreign currency. Yasmeen, the owner of the firm, wants to assess...
Sometimes, economies enter crises as a result of the combination of various circumstances. Governments may try to address these situations by implementing laws, which become known as stabilization policies. The advantages of such an approach are apparent when the efforts to rescue the nation from its issues come to fruition....
Pricing can be defined as the method of determining what a company achieves after supplying its products. Methods of pricing a product The following methods are used when pricing commodities. Premium pricing is a process whereby the price of a commodity is priced consistently at or near the possible price...
According to BBC news, the IMF required the Irish government to come up with “austerity measures” aiming at reducing the Ireland output by 11%, in which the country’s budget would be 3% down. The international monetary fund (IMF) also required that Ireland should reduce the benefits of the unemployed and...
Financing the deficit doesn’t have offsetting effects. Some economists believe that government financing of deficit spending offsets the deficit’s expansionary effect. They believe that government borrowing increases interest rates and crowds out private investment. Crowding out is the offsetting of a change in government expenditures by a change in private...
According to the law of demand, consumers tend to purchase more of a particular product if its price declines and buys less if the price increases. Using price elasticity of demand, it is possible to measure the consumers’ responsiveness toward price changes. The price elasticity of demand varies depending on...
Currency exposure risk is the risk or the possibility of incurring financial losses in the future payments from economic transactions, as a result of deviations of exchange rates from the expected future rates of exchange. Multinational organizations are usually prone to such risks, given the fact that they cannot operate...
Assessing citizens’ views on the role of their state in the world arena is a tool that allows characterizing specific beliefs from the perspective of social, economic, and other factors. Concerning American identity, one can agree that the United States is at the top of the world rankings, and various...
The exploration of the causes of business cycles grew interested after an increase in the severity of economic depression caused concern in the late 19th and early 20th Centuries. Sunspots have been blamed to be the causes of recessions in that they affect the quantity and quality of the goods...
The rapid increase in U.S. imports in 2010 was too high to compare with the macroeconomic indicators. In fact, the surge in imports came in handy to help the world overcome the 2010 recession. This is because recession would cause people to spend more due to the high inflation rates,...
The theories developed at different times. This means that they base on continued study of macroeconomics over time. Although none explains all the macroeconomics complications comprehensively, each of the theories addresses a portion of the delicate and complicated field. As an economist, the view of the macroeconomic environment is well...
Before the application of the theory and principles of International Economics to the case study of the UK, it is necessary to have a brief look at these theories. For the last hundred years, industries have appealed the governments for protection, and societies have debated the advantages and of free...
Labor Market Analysis refers to the process of surve of different aspects of the labor market in order to identify different trends in the market like the availability of work opportunities, prevailing salary and wage rates as well as the availability of people possessing the necessary skills and knowledge to...
20% sales tax will not lead to a 20% or greater loss in sales as the price will be increased to include tax. This will happen because the costs of doing business will increase. As a result, since the price increases, the quantity demanded will decrease, according to the law...
Freight forwarders accumulate their business earnings by combining small volume shipments from different customers to form a sizeable load and use one means of transport t at their disposal for the delivery missions. A convenient location is set where a local operator then delivers single loads to their respective client’s...
Planned aggregate expenditure Economically, aggregate expenditure (AE) can be described as the total expenditure on goods and services that are produced in an economy over a given period. Aggregate expenditure is composed of other expenditures including consumption (C), investments (I), government spending on goods and services (G), and net exports...
Poverty thresholds are used for determining the poverty status by comparing a set of dollar values to annual income, varying by the householder’s age, number of children, and family size. If a family’s threshold value is more than its before-tax income, the family and all its individuals are considered to...
Both East Asia and West countries have passed their unique path of economic and cultural development. The main difference between these two rivals and partners simultaneously is their characteristic views on the ways of achieving economic prosperity and well-being. While the Asian governments rely on active and direct participation in...
Between the 17th and the 18th centuries, mercantilism emerged as a dominant economic philosophy. This particular economic philosophy advocated for aggressive efforts towards increasing exports and severe restrictions towards reducing imports. Nations would, therefore, become rich by exporting more than they imported. By developing the absolute advantage theory, Adam Smith...
Economists use the gross domestic product (GDP) as an indicator of prosperity in the country. To put it simply, GDP is the state’s annual income; therefore, GDP per capita is the amount of money the national economy produces per person per year, which demonstrates the country’s standard of living. GDP...
Macroeconomics is a branch of economics that focuses on the decision-making process, performance and structure of the economy as a whole. It utilises tools such as GDP and price indices to analyse the economy. Various schools of thought have participated in macroeconomic development. They explain various phenomenons chronologically. The origin...
It is true that economic success is brought about by capitalism. Schumpeter explains that capitalism is not in motion rather it is fixed. This theory does not have the accumulation of capital rather the money is in a continuous circular flow. Capitalists have the least profit and they normally receive...
The time value of money assumes that the value of money today is greater than the value of money tomorrow. This theory is explained by the presence of inflation rates on market. In the case of salaries, the amount of salary paid is calculated based on the change of time...
Economists disagree about how big the role of the government should be in a capitalist market economy. Some classical economists, such as Adam Smith, devised a set of concepts that remain strongly associated with capitalism. His theory of the “invisible hand” of the market, through which he states that the...
Costs are major determinants of pricing since margins need to be maintained. Suppose the firm wishes to reduce selling prices and makeup in a higher quantum, thus achieving economies of large-scale production. This is needed for cash inflow purposes and also to keep inventories moving so that there are no...
Unemployment is a situation where persons aged 16 years and above, who are ready, willing and able to undertake jobs and are actively searching for jobs are not working at any specified time. It is inversely proportional to the economic growth. However, it is undesirable as it increases loss of...
Outsourcing- transfer of ownership of a process from a buyer to a third party/ supplier is taking the world by storm. It is believed that much of the momentum was in the mid 1990 and most companies relied on outsourcing specifically as a planning tool due to its lower cost,...
China and the U.S. are each other’s chief trade partners, so it is not surprising that the trade war between them has been very damaging to both. In prosecuting this war, the Trump administration hoped to address concerns about job loss, unfair and illegal practices such as intellectual property theft,...
The coronavirus pandemic is going to have a lasting negative effect on the U.S. economy. As the article “Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy” by Nuno Fernandes shows, the economists of leading American banks agree that Q2 2020 will see a sharp contraction in the economy....
During the past, in the U.K, the revenues from slavery and the slave trade filtered back into the Great Britain economy in indirect ways, the insurance companies, bankers, and financial institutions all participating as active traders for investment. The British manufacturing industry, according to historians, received the extra spur of...
Effect of oil prices on demand for kilometers traveled The rising of oil prices prompts governments across the world, from EU countries to the United States, to increase or decrease interest rates so as to control their economies. Because of a continuous rise in the prices of petroleum products, the...
The main reason for booming inflation in Russia in early 90s as the case-study suggests was the transition to market economy which required deregulation of economy and transformation of planning economy into viable and effective economic governance. As abovementioned case-study further suggests ‘the central element of this plan was an...
As the case-study of Russian Rubble Crisis suggests ‘with inflation rising, the ruble tumbled in the value against the dollar and other major currencies’. In January 1992 the exchange rate rest at $1+R125 and in the following years it had being declining until default in 1998. In 1996 Russian government...
It is clear that the introduction of this tax will cause an increase in prices on the corresponding products, which, in its turn, will have an impact on supply and demand. Companies selling these items will try to minimize the increase at the expense of some other costs (for instance,...
Inflation is the continued growth of prices in an economy over an extended period. It can be seen as a sign of economic growth, as with increases in purchasing power and demand, the inadequacies in supply can lead to increased costs. Burton, Deciba, and Brown also note that the alternative...
WTO differs from GATT as it is based on different principles and policies of trade relations. GATT is just a set of rules while WTO is an international institution with governing bodies. In contrast to GATT, WTO commitments are full. GATT rules and principles of trade cover only retail trade...
Industrial relations mostly cover such topics as corporate restructuring and economizing. In the mass media reporting of industrial relations, there are also topics and issues concerning changing relationships in the employment sector of both union and non-union settings. Another issue is that of work systems that are highly performing and...
The United States department of agriculture’s economic research service defines an individual as poor if his or her income is not enough to purchase the basic necessities that are food, shelter, clothing, and other essential goods and services. There are several myths associated with people living in poverty in America....
Money is something which can get us some product or service. It is a medium of exchange that works as a liquid asset and works as a causative factor in any economy. During the early ages when ‘money’ as such was not in wider use, people used to interact in...
It won’t be an exaggeration if we say that ‘Economics’ is the key driver in carrying along with the resources, benefits, and people-to-people exchanges. It involves the study and analysis of various alternatives or options available before opting for one particular option, in such a way that the job is...
Macroeconomics is the part of economic theory, which regards the economic system as a whole: with all the key aggregates of the household issues, business, and government sectors. Originally, it entails all the measures of the total economy in its basis. According to McConnell and Brue, it is necessary to...
Economic growth has several implications for the economic and social conditions of a country. When an economy grows, it creates opportunities for individuals and companies to earn more. The reason for this is that it generates new demand for products and services that businesses produce and consumed by individuals. Therefore,...
There are considerable differences in the levels of income between countries observed all over the world. The primary factor that causes this difference is the existence of an open market in certain countries, which attracts people from developing countries and enormous investments that generate opportunities for new businesses and sectors...
Microeconomic reform issues have been aimed at ensuring that there is economic efficiency through the right policies. These policies have been directed towards the elimination of distortions and reformation of the economy. Since 2000, the Austrian economy has undergone numerous tax reforms. There has been the need to encourage savings...
Unemployment rate and the participation rate One of the major differences between the unemployment rate and participation rate is in their relation to age. Research shows that the unemployment rate is higher among young people who have recently qualified to join the labor market. The unemployment rate among men is...
The world has changed a lot since the fall of the Berlin Wall. Many changes have been political but they have had an economical impact also. The first major change was the fall of communism in Eastern Europe. This meant that even the state programmed model of economy was over....
Trade policy is based on complex principles and issues determined by the national economic environment and international laws. The two principal issues of trade policy are the debate over trust and fair competition. The liberalization of trade creates new problems and threats for local business required protection and financial support....
China It is a former recipient of US aid and one of the most populated nations in the world. It has a high unemployment level, poverty, and social unrest. Its population causes a challenge to the economy because the economy has to grow fast to meet the fast-growing demand from...
Today there are still problems that occur within the international negotiations for trade due to the trade barriers such as high tariffs on export goods. Such barriers and unfavorable rules greatly affect the trade for developing countries. The trade barriers prevent developing countries from trade integration with the developed countries....
In the 1980s, the US experienced a recession that affected almost all sections of the country. The real national product (GNP) fell by 2.5% in 1982, and the level of unemployment rose above 10 percent. This led to the industrial section being idle. Most of the workers in the industrial...
The current economic growth experienced in China is nothing short of phenomenal. With GDP growth rates of up to 9% and GDP of US $6.9 trillion by the end of 2007 in purchasing power parity and the US $ 3.4 trillion in exchange rate terms, China has come of age...
The Chinese economy is the second-largest in the world, commanding a GDP of $6.9 trillion in the year 2007 based on purchasing power parity. This represented a yearly growth rate of 9.9% p.a. Since the 1970s, China has experienced considerable reforms in its economic sector. It has carved a niche...
New deal policies consisted a package of economic programs and strategies that were drafted during the 1933- 1936. The main goals of these policies were to deal with the great depression effects that were being encountered in the United States. The policies include policies to reduce unemployment, to reform financial...
Foreign direct investment commonly denoted by FDI is a measure of a country’s involvement in the affairs of another. It shows a country’s foreign possession of assets of a foreign country. Foreign direct investment can be a good measure of economic globalization where a country can own productive assets in...
It is a surprising fact that the cost of food in the life of a typical American family can take up as much as 13% of the monthly budget. “Food accounts for about 13 percent of household spending compared with about 4 percent for gas.” The increase in milk prices...
The American economy changed greatly during the Second World War with the great depression hitting the world and in particular the United States. There was a tremendous fall in tax revenues, profits, and personal income this affected wealthy people as most of their companies collapsed. Triggering rise in commodity prices,...
The economic cycle is the long-run economic fluctuations that impact the productivity of the economic sectors. The cycle is mainly divided into different phases; the expansion phase is characterized by huge capital investment and revenue growth. Firms may not experience profitable moments, but the potential to make huge profits are...
Economic interdependence can be looked at in a number of ways, this is basically the ways and means through which growth is achieved through the various development projects that are initiated in the region. There is also more to do with the kind of lifestyles that people live that contributes...
The market system and the command system are the two broad types of economic systems used to address the economizing problem. In the market system, also known as capitalism, private individuals own most resources, and the market coordinates most economic activity. In the command system, also known as socialism or...
Recently we have seen oil prices fluctuating a lot as compared to the past because of demand and supply issues that control the pricing of the commodity. If we apply demand and supply models which we have learned in microeconomics, we see that both demand and supply are responsible for...
During the period 1978-2005, China achieved a growth rate of 9% per annum which is the highest rate achieved in the entire world during the given period. Much of this achievement is because of the radical initiatives adopted by China in regard to foreign direct investment (FDI). Having been an...
China continues to maintain its lead in regard to FDI inflows in attracting the highest investments amongst all the developing countries. The economy continues to grow at 9% and the implementation of the requirements of the World Trade Organization fuelled the interest of investors as China continued with its policies...
As the world markets change and businesses become more profit-driven, the levels or competition and the furthest that the producers are willing to go in order to gain an upper hand in a given economy seems to be boundless. This has led to the need for each country to determine...
Unemployment is a situation where persons aged 16 years and above who are ready, willing, and able to undertake jobs and are actively searching for jobs are not working at any specified time. It is inversely proportional to economic growth. However, it is undesirable as it increases the loss of...
When comparing the wealth or living standards of a country with those of another country over a given period, economists normally utilize the Gross Domestic Product (GDP). GDP is a tool used to evaluate the value of goods and services produced in a given country. Economists have used the GDP...
A factor of production in economics is a resource that is used in the process of production of goods and services. There are various factors of production, namely, land, labor, entrepreneurship, and capital. Goods and services cannot be factors of production in business as they represent the eventual result of...
GDP, or Gross Domestic Product, is one of the essential indicators determining the country’s economic health. The GPD is divided into two different types: real GDP and nominal GDP. For a better understanding of the global economy, it is necessary that one understands how both types are calculated and used....
The economic problem is the scarcity of vital resources used to satisfy needs and wants. It can also be viewed as the wrong use of scarce resources in society. SteamScot is currently facing an extremely low demand for higher-value tickets. SteamScot has used all its resources to capitalize on its...
The term multiplier in the economy, in a broad sense, means a particular economic variable that, when changed, causes changes in other economic factors. At the same time, such a change can be multiple; for example, doubling of the multiplier may triple other factors. In general, this term is used...
Modern economies are monetary economies, where money forms an essential factor in the day to day activities. We buy and sell things for money, borrow money, lend money, the taxes are paid to the government and the payments received are in terms of money. The institutions of money were not...
