What factors influence competition in microeconomics?

July 8, 2024 No Comments

A: From a microeconomics perspective, competition can be influenced by five basic factors: product features, the number of sellers, barriers to entry, information availability and location. These factors hinge on the availability or attractiveness of substitutes. Product features essentially describe the level of differentiation. If

What goods and services do command economies produce?

July 8, 2024 No Comments

A: A command economy is an economic system in which the government, or the central planner, determines what goods and services should be produced, the supply that should be produced, and the price of goods and services. Some examples of countries that have command economies

What happens if the Federal Reserve lowers the reserve ratio?

July 8, 2024 No Comments

A: If the Federal Reserve decides to lower the reserve ratio through an expansionary monetary policy, commercial banks are required to hold less cash on hand and are able to increase the amount of loans to give consumers and businesses. This increases the money supply,

What happens when inflation and unemployment are positively correlated?

July 8, 2024 No Comments

A: Positive correlation between inflation and unemployment creates a unique set of challenges for fiscal policymakers. Policies that are effective at boosting economic output and bringing down unemployment tend to exacerbate inflation, while policies that rein in inflation frequently constrain the economy and worsen unemployment.

What happens when M2 money supply grows faster than the overall economy?

July 8, 2024 No Comments

A: Generally speaking, inflation occurs if M2 money supply expands faster than the rate of productive growth in the overall economy. This means prices are higher than they otherwise would have been. It’s important to distinguish between certain components of M2, however. Cash and checking

What impact does disposable income have on the stock market?

July 8, 2024 No Comments

A: In theory, the impact that disposable income has on the stock market is that a widespread increase in disposable income leads to increases in stock valuations and, therefore, increases the overall value of the stock market. Disposable income is defined as the total amount

What impact does economics have on government policy?

July 8, 2024 No Comments

A: Governments may make policy changes in response to economic conditions. Government regulation of the economy is frequently used to engineer economic growth or prevent negative economic consequences. During periods of weak growth, Keynesian economists recommend lowering interest rates to encourage borrowing and restore economic growth.

What impact does government regulation have on the financial services sector?

July 8, 2024 No Comments

A: Government regulation affects the financial services industry in many ways, but the specific impact depends on the nature of the regulation. Increased regulation typically means a higher workload for people in financial services, because it takes time and effort to adapt business practices that

What impact does industrialization have on wages?

July 8, 2024 No Comments

A: Industrialization is the transformation of a society from an agrarian economy to an industrial one. Industrialization has enormously positive impacts on wages, productivity, wealth generation, social mobility and standard of living. During industrialization, all wages tend to rise, though the wages of some rise

What impact does inflation have on the time value of money?

July 8, 2024 No Comments

A: The impact that inflation has on the time value of money is it decreases the value of a dollar over time. The time value of money is a concept that describes how the money available to you today is worth more than the same amount

All Rights Reserved