And Disadvantages Of Foreign Direct Investment

The economic stance contractionary means the government is collecting more money than what is spent. A neutral stance means a balanced economy, which normally leads to more tax revenue for the government. Lastly, expansionary means the government is spending more money than what they are collecting. 2. What are the four different types of economic resources?

Economic growth means an increase in real GDP. This increase in real GDP means there is an increase in the value of national output / national expenditure. The benefits of economic growth include: Higher average incomes. This enables consumers to enjoy more goods and services and enjoy better standards of living. Lower unemployment With higher output and positive economic growth firms tend to employ more workers creating more employment UK unemployment rises during a recession – falls during periods of economic growth.

While the average income appears to be rising due to the increase in trade and production the gap between the high skilled, high wage workers and low skilled, low wage workers increases. This could be due to the introduction of mechanised corporations taking the place of labour intensive operations as well as the shift in focus from national to international trade. Globalisation allows some countries to exploit cheap labour in other countries to the detriment of the lower skilled workers in their own country who are no longer in demand and can therefore not command a fair

Introduction When people think about globalization, they often first think of the increasing volume of trade in goods and services. Trade flows are indeed one of the most visible aspects of globalization. But many analysts argue that international investment is a much more powerful force in propelling the world toward closer economic integration. Investment, often alters entire methods of production through transfers of know-how, technology and management techniques, and thereby initiates much more significant change than the simple trading of goods. Over the past ten years, foreign investment has grown at a significantly more rapid pace than either international trade or world economic production generally.

So, many people are most likely to invest and start new corporations or enterprises. The fact is that the upper class should pay more and higher there taxes. Making their taxes higher can help many others who need money. Such as poor people, organizations, and others who are struggling with certain things. It wouldn't hurt them to higher the taxes because they just get so much more money than lower and middle class.

When capital markets are enables to offer funds, increase the risk of competitive entrants. The industry will becomes a magnet to new if a firm have a very high profit. Unless got way we can solve this problem if not the competition and competitor will increase. Firms in an industry try to keep the new entrants low by barriers to entry, first is economies of scale. An economy of scale is when an industry is characterized by large economies of scale for new firms to enter and participate, if they are willing to accept a cost disadvantage.

Firstly, that the return on capital is higher than the growth of income; the notable r>g phenomenon, a “process by which wealth is accumulated and distributed.” Put another way, the determinants of inequality and the concentration of wealth are that returns on assets exceed the growth rate. This is not some “market imperfection,” Piketty argues, conversely “the more perfect the capital market (in the economist’s sense), the more likely r is to be greater than g.” So the share of global wealth held by a tiny fraction of the population rises much more rapidly than average global incomes. Similarly, retirees’ pension plans accumulate at the rate of assets. All of this factors into the flow of inheritances, a kind of distribution of asserts through time, that further exacerbates the concentration of wealth. There are demographic changes that Piketty does not address, such as declining birth rates amongst the wealthy that compound the concentration of

Therefore, normal goods possess positive income elasticity. The quantity of normal necessities demanded will rise with the revenue but at a measured speed than that of luxury goods. This phenomenon is due to the fact that consumers will opt to buy more extravagant goods and services rather than more of the necessities with their improved incomes (Haque 18). During a time period of improved incomes, the demanded quantity for luxurious commodities will rise at a faster rate than the demanded quantity of necessities. The demanded quantity of luxury products in response to variations in income is very sensitive.

Many people are strongly debating whether or not the rich should pay higher taxes. I believe it should be that the rich do pay higher taxes. When times in the economy are rough, the government needs to look consider at how they could bring in more money. Charging the wealthy higher taxes could be a strategy the government could use., and the wealthy people are the ones who could afford it. But, taxing the rich more also wouldn’t be impartial that fair because the government already wastes much of the money pay they collect.

Cost-push inflation happens when we face higher prices due to the increase in cost of production and higher costs of raw materials. It is determined by supply side factors. Cost-push inflation can be caused by higher price of commodities, imported inflation, higher wages, higher taxes and higher food prices (Economics Help, 2011). Demand-pull inflation happens when there is an increase in the price of goods and services when demand increases too much that it outpaces supply (US Economy, 2015). Sometimes people refer it as “too much money chasing too few goods”.