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What impact will interest rates have on the level of Aggregate Demand in the economy?

Aggregate Demand includes consumption, government investment, net exports and investment. Lower interest rates will make it less attractive for consumers to save, as the returns they will receive on their sa...
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Answered by Oliver P. • Economics tutor
2809 Views

How could I evaluate a government policy which uses subsidies for a certain industry?

They might want to check if the price elasticty of demand for the good is elastic or inelastic. If it were elastic then the percentage change in price would be smaller than the percentage change in quantity ...
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Answered by Alice K. • Economics tutor
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How can I use a graph to show the effects of a negative change in interest rates on GDP?

First one must understand the effects of a change interest rates has, If interest rates fall, we would likely see an increase in levels of consumption as people do not receive such a great return from intere...
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Answered by Tom Z. • Economics tutor
2760 Views

If timber prices fall by 30%, what will be the expected % change in demand for timber in the economy if the Price Elasticity of Demand is -0.5, and explain the effect on revenue for a timber-selling firm.

Price Elasticity of Demand (PED) is a measure of the responsiveness of demand to a change in price. A PED of -0.5 suggests demand is price inelastic – as Price falls by 1%, Demand will increase by 0.5% (less...
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Answered by Harry C. • Economics tutor
2168 Views

What are the characteristics of a perfectly competitive market?

In practice it is unlikely that the conditions of a perfectly comeptitive market will exist, however these conditions are set as: Many buyers and sellers in the market Homogenous products Perfect information...
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Answered by Esmee M. • Economics tutor
3115 Views