If unemployment falls, less people will be claiming unemployment benefits and other similar pay-outs from the government, this will allow a lot of tax to be spent on other things, such as expanding public services further, which also leads to an increase in living standards. Another benefit of economic growth is the increase in confidence, with all these new goods and services on offer to the country, the consumer
In order to avoid making a further loss, if another recession was to occur again in the future, I would suggest that a reduction in employees would be beneficial for the business. By making this vital decision, they will be saving an immense amount of money as they will not be paying as much wages as they currently are. I would also recommend having more frequent special deals (such as ‘BOGOF’) as this will slowly but surely attract customers to spend their money in Tesco rather than another supermarket. However, these special deals should be genuine special deals as Tesco have been known to increase prices and then claim there is a special offer going on (See Appendix 34). Regarding political factors, I think the grants/loans which are borrowed by Tesco via the government would impact on the business negatively as they will have large sums of money to
If house Prices fall it will cause significant problems for the UK economy. There will be a fall in consumer wealth, and declining house prices can lead to negative equity. (house prices are less than what people bought them for). Therefore, some people will have their home repossessed and will also owe money on their old mortgages. The effects of a fall in consumer wealth will be to reduce confidence and consumer spending; equity withdrawal will slow down sharply – this has been a significant contributor to increasing AD in UK).
If anything affects these factors will result in affecting the demand. For example, if inflation is getting too high, interest rates will be increased to stabilize the economic growth in the economy. This is the result of having the economy already close to full capacity which means that a further increase in AD will mainly cause inflation. Demand side policies include monetary policy and Fiscal policy. Monetary policy are actions of central bank, currency board or other regulatory committee that determines the size and rate of growth of the money supply, which in turn affects interest rates.
Furthermore, tuition fees increase inequality as it discourages people from poorer backgrounds to attend. However, this is somewhat offset by the fact that tuition fees are often means tested, so people from low income get free education anyway. However, people from middle income families may be reluctant to take on loans to finance higher education. However, there are arguments against abolishing tuition fees. Firstly, the external benefits of higher education may be less than imagined.
Since privatisation, companies such as BT, and British Airways have shown degrees of improved efficiency and higher profitability due to the competitiveness within their respective industries. It can also be noticed that vast improvements in technology have occurred due to investment in order to achieve these efficiency and profit increases. As efficiencies increase, firms are more willing to produce at a lower price, effectively shifting the supply curve to the right. This causes a reduction in the price from P1 to P2 and an increase in the equilibrium quantity from Q1 to Q2. Another possible advantage of privatisation is an increase in competition as the privatisation of state owned monopolies usually occurs at the same time as deregulation of the industry.
There is a failure to realise that long term better economic welfare also means general higher standards of living, as people have enough money to buy everything they need and some of what they want, competition is rife so drives quality up and prices down, and the government are able to take in more taxes from firms who are much healthier financially. This mass employment may lead to more jobs, but the workers themselves or the way they’re used is hugely inefficient. Another reason that labour production in the UK is so low is the lack of competition. There is a strong body of evidence that competition enhances productivity. So, with a lack of one there is a lack of the other.
A better education and health care will improve the labors’ output, as productivity will be higher. Further to this, people will be more able to save more from their increase in income, which allows higher rates of investment and therefore increase in growth. The graph above is a PPF curve, which shows consumer goods against capital goods. Since there is an increase in Aggregate demand, this will potentially lead to an increase in economic growth as seen from the graph above. However, on the other hand an excessively equal
The U.S. prices should fall as countries like India offer their services cheaper compared to them. It would require that the Americans should have more disposable income which could then be spent in other part of the economy. d) Who might benefit from the globalization of health care? Who might lose? The increasing health care cost is likely to continue to put pressure on the industry to find cheaper alternatives to handling not only direct patient care,
This is unlikely to be the case in the UK at the moment as low interest rates and a large budget deficit has not cause significant inflation. A further conflict with loose demand side policies might the effect on the current account. With higher economic growth and consumption, we might expect an increase in the demand for imports and a worsening of the current account. This is likely to be a fairly significant effect for the UK because it has a high marginal propensity to import – especially for manufactured goods. Furthermore, if there is inflation from the demand side policies then there will be a fall in UK competitiveness and a