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Explain how a fall in interest rates can affect total spending in the economy.

A fall in interest rate will affect consumption, investment and exports-imports.Firstly as interest rates fall, it becomes cheaper to borrow money and it becomes less profittable to save money, therefore the...
MC
Answered by Maria C. • Economics tutor
2226 Views

Explain what is meant by a negative externality and give an example of a negative externality that arises from fuel consumption.

A negative externality is a spillover cost affecting a third party from an economic transaction.A negative externality that arises from fuel consumption is the air pollution affecting the health of the popul...
JB
Answered by Jessica B. • Economics tutor
4447 Views

Explain two reasons why firms merge.

By merging a firm will grow in size allowing to benefit from economies of scale as the average cost of producing is reduced. In the case that the merge is horizontal the firm will gain market share as well a...
AT
3359 Views

What is the main government objectives to maximize economic growth?

There are many government objectives that maximize economic growth. Most common ones are Fiscal Policy, Monetary policy and supply side policy. Fiscal Policy is the decisions made by the government on spendi...
GE
Answered by Gokhan E. • Economics tutor
5659 Views

Give the definition of an externality and explain why it is a market failure?

An externality is the cost or benefit of an economic transaction to any party that was not part of the economic transaction. Examples would be the negative cost on society of smoking through second hand smok...
TD
2326 Views