Real Life Examples Flashcards
Increase in supply
Newly found oil deposits
Decrease in supply
Drought, reducing crop yields of cocoa plants in Ghana
Increase in demand
Successful marketing campaign for a new soft drink: changes in consumer preferences
Decrease in demand
Moral reasons: Starbucks of corruption and tax evasion reduces demand
Merit goods
Public libraries
Demerit goods
Alcohol, cigarettes, drugs
Substitutes
Coke and Pepsi
Complements:
Coffee machines and coffee pods
Inferior
Own brand groceries
Luxury
Fine wine
Necessity/commodity
Food, water, shelter, medicine/healthcare
Interventionist Supply side policies
- Norway spends 7.6% of its budget
- Singapore offering Jobs Support Scheme to SMEs during COVID-19
- Supporting emerging industries: Pakistan is looking to double its IT industry in two years by setting up dedicated tech zones across the country
Income and wealth distribution
- US, 2020: richest 0.1% own over 20% of the country’s wealth and top 1% owns over 40% of wealth
Three richest Americans held more wealth than the bottom 50% - England: less than 1% owns more than half of England (about 25000 of landowners)
- World: top 1% owns half of the world’s wealth. The bottom 50% owns less than 2% of the global wealth
Expansionary Fiscal Policy
American Recovery and Re-investment act (2009)
The US govt included a stimulus package in response to the great recession
Quantitative Easing
Abenomics (2012 - 2018)
fiscal + monetary policies
aimed at stimulating growth and ending deflation
Fall in taxes
GST Tax in India (2019)
Indian govt cut the GST on a number of goods to boost consumer demand and stimulate
Fiscal budget cuts
Canadian Federal Governments Budget Cuts (1995)
- to reduce the budget deficit
- stabilising govt. finances
- PM Jean Chrétien
Austerity
Austerity measures in Greece (2010 - 2018)
Reducing government spending and increasing revenue
- cuts to public sector wages and pensions
- cuts to public sector wages and pensions
- increasing taxes
- privatisation of state-owned assets
-
Unemployment benefits
US providing unemployment benefits during COVID 19
-> by feb 2021, over 19 mill were receiving unemployment benefits
Public works programs
China - infrastructure investment, to create jobs + stimulate economy
in response to 2008 global financial crisis, chinese government launched a massive stimulus program
creating jobs and supported economic growth
Fiscal policy for unemployment
Spain - wage subsidides
direct aid to businesses during COVID 19
NOV 2021 -> unemployment reate was 14.8%
Active labour market policies
Germany introduced a vocational training system, combines classroom education with on-the job trainig
esp helpful w youth
2020 german unemploymnet was 5.8% as opposed to the euro area average of 15.4%
Monetary policy for unemployment
Australia -
RBA during covid 19 lowered interest rates to increase availabilty of credit
DEC 2021 - 4.2%
Taxes on demerit goods
‘sin taxes’ on alcohol and tobacco products
tax revenue has been used to fund health programs
minimum pricing for demerit goods
Scotalnd - targets the cheapest, strongest alchoo profucsts
2018
has been effective in reducing alcohol consumption in heavy drinkers
demerit goods - education
Australia - range of health education campaigns
tobbaco + alc
changing attitudes, mass media campaigns, school-based programs, community outreach initiatives
monopoly power - laws
antitrust laws in US
1890
break up monopolies in oil, telecommunications and software
monopoly power - laws eu
Merger control laws
2023/2024
prevent companies from merging in a way that would create a monopoly or significantly reduce competition
esp in pharmaceuticals, telecomms, energy
monopoly power - japan
price regulatioin
in industries such as electricity and gas
kepps prices in check, been credited with reducing the cost of living for conumers
monopoly power - nationalisation
Bolivia
nationalised oil and gas
has given the govt, more control over industries and reduced the power of foreign companies
increasing govt. revenue
monopoly power - competition authorities
SA established a competition commison w the country’s competition act in 1998/1999
preventin anti competitive behaviour
particularly in banking, telecommunicatoins, food + beverage
promoting competitino and reducing monopoly power
