Month: October 2020

Economic governance and transparency are about being open and exposed to constructive criticism and rating on matters pertaining to sound economic management and performance. In perspective are the following issues: Allocation/distribution of national resources Strict adherence to established economic management Read More …

Reduction of Government deficits has increasingly become an important issue in fiscal policy framework of developing countries because of some reasons like: Increased public debt which is costly to maintain – debt servicing is costly in terms of high interest Read More …

Budget deficit – the excess of government spending over revenue; the main causes of government budget deficits include: Commitment to social welfare programmes Demographic trends Fundamental macro economic shifts eg slower growth in productivity, volatile inflation, increasing structural unemployment; together Read More …

Hyper inflation-that which tends to get out of hand/control such that the value of money declines rapidly to a tiny fraction of its former value and eventually to almost nothing, so that a new currency has to be adopted. It Read More …

Productivity/efficiency – skill and expertise Real wage rate (the proportion of TC accounted for by labour cost) Mobility and the marginal rate of technical substitution between labour and other factors of production particularly capital. Technology – depending on the resource Read More …

Production costs – a function of factor prices. Technology Government policy (taxes & subsidies) Natural factors/events (e.g weather, pests, diseases etc) Prices of other related goods (substitutes & complements) Transport and communication Political stability/atmosphere Future expectations Changes in the supply Read More …

The law of diminishing returns states that “As additional units of a variable factor are added to a given quantity of a fixed factor, with a given state of technology, the marginal product and the average product of the variable Read More …

Case For: Infant Industry Argument – If an industry is just developing, with a good chance of success once it is established and reaping economies of scales, then it is necessary to protect it from (external) competition temporarily until it Read More …

With a given import quota, an increase in demand will result in a higher domestic price and greater domestic production and lower consumption; however, with a given import tariff, an increase in demand will increase consumption and imports. An import Read More …

Effective market separation e.g in terms of time, age, geographical location etc. Absolute control over supply. Different price elasticity of demand in different markets.