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Comparative Advantage

In business economics this refers to the trading advantage one country has over another. It refers to the theory that, for greatest efficiency, countries should specialise in their areas of comparative advantage and trade with other countries for other goods and services. For example, Comparative Advantage can occur from natural resources (coal, gas, gold etc),… Read more

Expectations Effect

This refers to the economic theory that future expectations for the economy have a greater influence than government interventions. Expectations Effectassumes that by acting on the expectation of a future change that change is more likely to come about. For example, if a supplier believes the price of its product will be higher in the… Read more

Cost Push Inflation

This refers to sustained increase in the prices of goods and services resulting from sudden and rapidly rising prices. Causes of Cost Push Inflation can include rapidly rising oil prices as a result of war, rapidly rising food prices as a result of poor harvest, rapidly rising wage costs, rising import costs as a result… Read more

Demand Pull Inflation

This refers to the sustained increase in the prices of goods and services resulting from high demand. Demand Pull Inflation is typically stimulated by easy credit and hire purchase offers, accompanied by insufficient supplies. Demand Pull Inflation is a term normally found in business economics and financial management.

Cyclical Unemployment

This refers to the level of unemployment caused by a downturn in aggregate demand. Cyclical Unemployment occurs during times of economic downturn and recession which result in a lack of demand for goods and services. Cyclical Unemployment is a term normally found in business economics and financial management.

Structural Unemployment

This refers to the level of unemployment caused by decline in specific industries because of long term changes in market conditions. Structural Unemploymentmay reflect global economic changes, for example the development of offshore contact centres reducing the demand for local staff to provide these services. Structural Unemployment is a term normally found in business economics… Read more

PSBR

This refers to the Public Sector Borrowing Requirement. PSBR is the amount a government borrows to cover a gap between public spending and government receipt levels. In the UK this is now known as the Budget Deficit. PSBR is a term normally found in business economics and financial management.

M4

This refers to one of the economic definitions of money in the UK economy. M4 is also known as the ‘broad definition’ including the value of notes and coins in circulation plus banks’ operational balances held with the Bank of England, as well as money held in individual bank current and deposit accounts. M4 is… Read more

M0

This refers to government interventions which emphasise the importance of controlling money supply in maintaining a stable economy. Monetary Policy interventions include tightly controlling interest rates and money supply. Monetary Policy is a term normally found in business economics and financial management.

Monetary Policy

This refers to government interventions which emphasise the importance of controlling money supply in maintaining a stable economy. Monetary Policy interventions include tightly controlling interest rates and money supply. Monetary Policy is a term normally found in business economics and financial management.