According to most conventional measures, income inequality in the developed world has been rising. This trend has been argued to be particularly prevalent in the UK and USA, but the article below from The Economist argues that conventional measures may be mis-representing the differences between the better off and the less well off. Instead of looking at income inequality, it looks at consumption inequality.
The new (improved) Gilded age The Economist (19/12/07)
Questions
| 1. |
Define the terms (a) income inequality and (b) consumption inequality. |
| 2. |
Assess the extent to which income represents a good measure of economic wellbeing. |
| 3. |
Discuss two policies that could be used to reduce (a) income inequality and (b) consumption inequality. |
Inflationary expectations can be an important determinant of the actual level of inflation and so the Bank of England monitor people’s perceptions of inflation closely. Expectations of inflation are currently at their highest level in eight years.
Questions
| 1. |
Explain the transmission mechanism by which higher inflationary expectations are translated into inflation. |
| 2. |
What are the key determinants of inflationary expectations? |
| 3. |
Discuss strategies that (a) the Bank of England and (b) the government can adopt to reduce inflationary expectations. |
At the turn of the century, the UN Development Programme identified a series of seven Millennium Development Goals (http://www.undp.org/mdg/). The article linked to below from the Guardian, considers the progress that has been made towards these goals. Urgent progress is required if the goals are to be met by the target date of 2015.
Poverty, hunger and disease: so much done yet so much left to do Guardian (10/12/07)
Questions
| 1. |
What are the seven Millennium Development Goals. |
| 2. |
Discuss the action that is required if the goals are to be met by the target date of 2015. |
| 3. |
Analyse the extent to which an increase in overseas aid will help to achieve the Millennium Development Goals. |
A number of UK supermarkets, including Sainsbury’s, Asda and Safeway, have been fined £116m by the Office of Fair Trading (OFT) for price fixing. The OFT is still investigating other supermarkets, including Tesco which denies that it was involved in the price collusion. The collusion is estimated to have cost consumers around £270m in higher prices.
Supermarkets fined £116m for price fixing Guardian (8/12/07)
OFT hands out £116m in fines for milk price fixing Guardian (7/12/07)
Supermarkets admit milk price fix BBC News Online (7/12/07)
Videos
Farmers reaction to price fixing claims BBC News Online
Questions
| 1. |
Explain how Sainsbury’s and the other supermarkets colluded to fix milk prices. |
| 2. |
Assess the market conditions most likely to lead to price collusion in a market. |
| 3. |
Examine the role of the OFT in reducing uncompetitive and restrictive practices in markets. |
Research has indicated that communications technology can be a significant driver of GDP growth. In Africa it is possible that mobile phones and networks can provide opportunities for economic development and members of the GSM Association are proposing to invest £25bn in sub-Saharan Africa in the next five years.
Questions
| 1. |
Explain how improved communication technology can help create a higher level of economic growth. |
| 2. |
Assess the extent to which more extensive mobile networks will help to alleviate poverty. |
| 3. |
Discuss the advantages and disadvantages of foreign direct investment in mobile technology for sub-Saharan Africa. |