Category: Essential Economics for Business 7e and 6e
In many parts of the world poor water and sanitation are one of the biggest killers. The article below looks at the situation in the shanty towns of Dhaka in Bangladesh.
Where death by water is part of daily life Guardian (26/11/07)
Questions
| 1. |
What is the difference between economic growth and economic development. |
| 2. |
Assess the extent to which an increase in economic growth will help to deliver higher living standards. |
| 3. |
Discuss the effectiveness of foreign aid as a policy to improve the standard of water and sanitation. |
The fall in the dollar has continued with the value of sterling rising above $2.10 for the first time in 26 years. The articles below look at a range of issues related to the strong pound and there are also case studies of the impact on a guitar strings company and the manufacturer JCB.
Questions
| 1. |
Identify the main factors that have caused the fall in the value of the dollar. Use supply and demand to illustrate your answer as appropriate. |
| 2. |
Assess the impact of the strong pound on UK exporters and importers. |
| 3. |
Discuss whether intervention in the foreign exchange market may be appropriate to help UK exporters to remain more competitive in world markets. |
The article below by William Keegan is a discussion of a recent seminar he attended on ‘Black Wednesday and the rebirth of the British economy’. The seminar led him to consider whether policy makers should be guided mainly by rules or discretion in the development of policy. Many would argue that we have moved away from discretion and moved more towards fiscal and monetary rules for the implementation of policy, but the article discusses the extent to which this may be true.
When the going gets rough, can our rulers rely on the rule book? Observer (18/11/07)
Questions
| 1. |
Explain, using examples as appropriate, the difference between policies based on fiscal and monetary rules and discretion. |
| 2. |
Explain how the MPC “largely ignores the cumulative dangers of a high exchange rate” in its determination of interest rates for the UK economy. |
| 3. |
Discuss how effective the adoption of an inflation target has been in management of the British economy in the past decade. |
The Governor of the Bank of England, Mervyn King, has signalled that the next year may be the toughest for 15 years with lower economic growth than previously forecast. So, is the UK economy going off the rails?
Questions
| 1. |
Explain the main reasons why the Governor of the Bank of England expects a worse than forecast level of economic growth in 2008. |
| 2. |
Discuss the extent to which a cut in interest rates will help prevent an economic slowdown. What adverse effects could follow from such a policy. |
| 3. |
Discuss one other policy that the government could adopt to try to reduce the extent of the forecast slowdown in economic growth. |
22nd November marks the day when Americans celebrate Thanksgiving Day. However, the cost of this celebration has increased by 11% in the last year according to figures from the American Farm Bureau Federation. One of the main causes of this is the rise in turkey prices but other factors were important as well.
Thanksgiving dinner cost ‘up 11%’ BBC News Online (16/11/07)
Questions
| 1. |
Using supply and demand analysis, illustrate the price changes for turkeys identified in the article. |
| 2. |
Consider possible factors that may have led to the price changes for turkeys identified in the article. |
| 3. |
Discuss the likely change in the quantity of turkeys demanded as a result of the price rise. |
| 4. |
What is the likely approximate value of the cross elasticity of demand for cranberry sauce with respect to the price of turkeys? |