Category: Essentials of Economics 9e
Do you know what the current rate of economic growth is? Probably not. In the article below Larry Elliott argues that this may indicate that the link between economic growth and happiness has been broken and that alternative measures of GDP may be more helpful in analysing the performance of the economy.
Cameron should count on happiness Guardian (27/8/07)
Questions
| 1. |
Explain what is meant by the term ‘Index of sustainable economic welfare’. |
| 2. |
Examine three factors that may raise economic welfare that are not included in a conventional measure of GDP. |
| 3. |
Use the Friends of the Earth make your own ISEW site to analyse the factors that may contribute the most to economic welfare. Discuss the arguments for and against the introduction of an ISEW as an official government measure of economic welfare. |
In complete contrast to the holidaying habits of the Blair family, Gordon Brown chose to take his holiday this year in Weymouth on the Dorset Coast. Is he setting us a good example? Should we all be holidaying at home to support the UK economy? In the article below, David Smith looks at the impact of holidaying abroad on the UK balance of payments.
Holiday at home and do your bit for Blighty Times Online (26/8/07)
Questions
| 1. |
Examine the impact of growing overseas travel on the UK balance of payments. |
| 2. |
Assess the impact of a reduced tourism deficit on the rest of the UK economy. |
| 3. |
Discuss policies that the government could adopt to help encourage a reduction in the balance of payments deficit on tourism. |
The article below from the BBC website looks at the issue of microfinance – the provision of very small loans as a form of development assistance to help people in developing countries to support themselves and develop their businesses.
Small loans to women make big changes BBC News Online (21/8/07)
Questions
| 1. |
Explain what is meant by microfinancing. |
| 2. |
Examine the reasons why microfinancing is considered more effective at promoting economic development (as opposed to economic growth). |
| 3. |
Assess the extent to which microfinancing could help in other developing countries to promote economic development. |
Globalisation has reduced the bargaining power of unskilled workers and pushed up inequality in many western countries, the OECD said, urging governments to improve their social safety nets.” With the gap between rich and poor widening once again, the media have been considering the impact of widening income and wealth distribution. The articles below look at this widening gap and also at the ways in which the rich are using their money.
Gap between rich and poor widens Guardian (20/6/07)
For the super-rich it’s all give and take – at record levels Guardian (20/6/07)
Looking after the super-rich BBC News Online (Evan Davis blog) (9/8/07)
Questions
| 1. |
Define what is meant by the terms (i) Lorenz curve and (ii) Gini coefficient. |
| 2. |
Using illustrations as appropriate, show how the Lorenz curve and the value of the Gini coefficient have changed in the past decade. |
| 3. |
Assess the likely impact on the major macroeconomic targets of growing income inequality. |
| 4. |
Discuss policies that the government could put in place to try to reduce the level of income inequality. |
British Airways has been fined £270m for their part in a price-fixing cartel. Fines were levied by both the US Department of Justice and the UK Office of Fair Trading following an agreement between British Airways and Virgin to fix the level of surcharges charged to passengers as a result of rising fuel prices.
Where’s Branson’s apology? BBC News Online (Robert Peston blog) (7/8/07)
BA’s price-fix fine reaches £270m BBC News Online (1/8/07)
OFT defends ‘snitch’ policy Guardian (5/8/07)
BA boss speaks out over price fixing Guardian (3/8/07)
How arch rivals colluded to hike up cost of air travel Guardian (2/8/07)
Questions
| 1. |
Define what is meant by the term ‘price-fixing cartel’. |
| 2. |
Explain the characteristics of a market that are most likely to result in a cartel. |
| 3. |
Discuss policies that the government could put in place to prevent this kind of price-fixing arising in the future.. |