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Explain three difficulties economists face when they try to measure unemployment accurately.

Unemployment, while useful in some cases, is inherently flawed as a metric for socio-economic progress. Official unemployment statistics fail to take into account the issue of hidden unemployment, defined as...
CR
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Explain the meaning of the law of demand; distinguish between movements along and shifts of the demand curve.

The law of demand states that: 'as a product's price falls, the quantity demanded of the product will rise, ceteris paribus'. In other words, price and quantity demanded of a good are inversely related. This...
TD
Answered by Tom D. • Economics tutor
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Explain why the economy always returns to Yf in the new classical model.

Graph to accompany answer The economy is initially in equilibrium where LRAS = AD = SRAS. Real output is Yf and the average price level is P. If there is a decrease in government spending in the economy, the...
TA
Answered by Tolu A. • Economics tutor
4581 Views

Explain two policies governments might use to redistribute income.

A government can use a progressive tax system to redistribute income. The way this works is that as income rises, you pay a higher portion of that income in taxes. This is probably the most common way to red...
SK
Answered by Sofia K. • Economics tutor
5365 Views

To what extent is an increase in taxes an effective way to correct a negative externality of consumption in the case of tobacco.

Negative externality of consumption is a type of market failure in which Marginal Private Benefit (MPB- the demand of consumers at present situation) is higher than Marginal Social Benefit (MSB- the demand o...
E
2689 Views