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What is the key difference between the Keynsian and the Neo-Classical schools of thought? Explain using a diagram.

The Neo-Classical school of thought is built under the assumption of prices being flexible in both directions(upwards or downwards). On the other hand, Keynes suggested that wages are inflexible downwards, r...
GM
Answered by George M. • Economics tutor
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How can the central bank affect economic activity using monetary policy

A particular economy can go through many downturns and upturns in what is called the business cycle. A central bank may wish to dampen these fluctuations by using one of two tools. The first one is changing ...
MS
Answered by Martin S. • Economics tutor
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Explain the significance to fiscal policy of the philips curve, referencing the interrelation of its components.

The Philips curve charts unemployment against the change in rate of inflation. There is an inverse relationship between the two, therefore when unemployment rises, the change in rate of inflation falls. Cons...
WB
Answered by Will B. • Economics tutor
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Explain how a profit can be earned in the short run but not the long run in a perfectly competitive market.

This is a fairly common a) question on Economics HL paper one. It is a 10 mark question, so a maximum of 20 minutes should be spent on it in order to leave time for question b). It concerns the workings of t...
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Answered by William G. • Economics tutor
9554 Views

Give two disadvantages to the government of rising unemployment.

Government has to give out more employment benefits (increasing expenses and decreasing funding in other sectors in the economy 2)Government may see falling tax revenue due to falling average income levels.
FA
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