We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Why Do Market Economies Need Government United Kingdoms Economic growth, Inflation and Unemployment - Essay Example

Comments (0)
Summary
Market economies need governments for a number of key reasons: i) Governments can keep track on formation of monopolistic or oligopolistic powers in a market economy. Monopolistic and oligopolistic structures can form within a market economy and lead to dominance of some suppliers in their respective markets. …
Download full paper
GRAB THE BEST PAPER
Why Do Market Economies Need Government United Kingdoms Economic growth, Inflation and Unemployment
Read TextPreview

Extract of sample
Why Do Market Economies Need Government United Kingdoms Economic growth, Inflation and Unemployment

Download file to see previous pages... Such situations create disadvantages of buyers and reduce buyer surplus for those particular markets. For this reason, free market economy can potentially impinge on the rights of a certain segment in the economy (Acemoglu, Golosov and Tsyvinski, 2008). A fair exchange implies a relationship of equality between the persons concerned, which is absent in these scenarios. Sometimes, in a market economy the employer and the employee are not in a relationship of equality. The employer can attempt to dictate terms to the employees, therefore, a safeguarding body is required to ensure payment of minimum wages and to enforce health & safety measures (Agarwal, 2007). Government presence in needed in such situation to ensure rights of certain groups is not compromised.
ii) Governments are needed to provide provision of pubic goods whose benefits are distributed over a very large population. For instance, creation of roads and national defense cannot be provided by a private enterprise. Government interventions are needed in the market economic system for these provisions (Halm, 2003).
iii) Governments are also needed in market economic systems to provide social security to the citizens of the country. A market economic system cannot find mechanism to transfer funds from rich to poor. Governments serve the purpose of reducing income differences between rich and poor in an economy (Sharma, 2009). Government invention is, therefore, essential for redistribution of wealth and income for a healthy society. United Kingdom’s Economic Performance During Last Ten Years Growth Performance data of United Kingdom’s economy is graphed below. The data exhibits that the economic performance and growth rate of United Kingdom’s economy was at peak in the year 2000. The growth rate of the economy was highest which implies that the standard of living of UK citizens was increasing at a very rapid pace. GROWTH PERFORMANCE Year GDP Change 2000 3.90% 2001 2.50% 2002 2.10% 2003 2.80% 2004 3.00% 2005 2.20% 2006 2.90% 2007 2.60% 2008 0.60% 2009 ?4.9% 2010 2.10% 2011 0.70% Growth of UK’s economy hit the bottom in the year 2009. It appeared that the economy is on the path of improvement in the year 2010; however, growth figures were low again for the year 2011. Growth Performance the annual inflation figures of UK economy shows that inflation is rising even though growth rate of the economy is slow. Such figures are considered alarming because standard of living of people is compromised in two manners – through low income growth, at the same time, a considerably high level of inflation (Baumol and Blinder, 2011). Annual Inflation Year Inflation Rate 2000 2.1% 2001 2.7% 2002 1.3% 2003 2.9% 2004 2.6% 2005 3.2% 2006 2.4% 2007 4.2% 2008 4.1% 2009 0.1% 2010 3.7% 2011 5.1% Unemployment Rate of UK’s economy is exhibiting a trend of rising with the inflation rate of the economy. This is considered one of the most challenging macroeconomic situations in macroeconomic text books. This is because a high inflation is generally associated with lower levels of unemployment since all factors of productions are considered to be highly utilized. Rising unemployment with inflation indicates major issues with the economy which need to be resolved (Henderson, 2003). Unemployment Rate Year Rate 2001 5.1% 2002 5.2% 2003 5.0% 2004 4.8% 2005 4.8% 2006 5.4% 2007 5.4% 2008 5.6% 2009 7.5% 2010 7.9% Deflationary Gaps and Appropriate Policy Responses Deflationary gap in an economy is ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Jordanian Economic System History to Modern day
The paper will provide a detailed insight over projects that are being planned for the future to bring in greater level of development. In the past few years, Jordan has seen phenomenal economical growth as well as political stability. The history of Jordan dates back several thousand years and features prominently in many significant historical references.
9 Pages(2250 words)Term Paper
Economic Policy Recommendation. Unemployment and Inflation: Can we find a balance
This paper explores the relationship between inflation and unemployment and identifies an economic problem which economies face stemming from the business cycle of economic growth.
10 Pages(2500 words)Essay
The Current Economic Situation Marked by High Unemployment and Low Inflation
This essay gives an explanation of phenomenon of the contemporary economic trends that appeared in the Western Economies that witnessed existence of both high unemployment and high inflation at one and the same time. The researcher also the salient factors as well as requisite monetary and fiscal measures.
3 Pages(750 words)Essay
Interrelationships between economic growth, unemployment and inflation
It is shown in the paper that the concepts of economic growth, inflation and unemployment are associated with each other and influence each other as well. In any country, government wants the economic growth to be quick, on the other hand it is desired that the rates of unemployment were low along with rates of inflation within normal range.
6 Pages(1500 words)Research Paper
Problem of the Inflation in The UK Economy
According to the paper, increase in private and public expenditure, reduction in taxes, repayment of loans, population growth, exports increase and deficit financing are the causes in rise of demand-pull inflation. Industrial disputes, shortage of production factors, natural calamities are considered to be the causes in rise of cost-push inflation.
8 Pages(2000 words)Essay
Money Supply, Inflation and Economic Growth: An Empirical Study
Economists have found many divergent observations in their empirical analyses. There is a non-uniform evidence of the relationship between money supply, inflation and economic growth among countries. The pattern of relationship is uni-directional in some cases and bi-directional in others.
7 Pages(1750 words)Essay
Economic Growth Of GDP, Unemployment And Inflation For 5 Years Of A Country - Japan
One distinguished attribute of the economy is how manufacturers, dealers, and distributors work mutually in strongly-weaved clusters called keiretsu. A second essential aspect has been the assurance of life span employment for a significant segment of the urban labor strength.
6 Pages(1500 words)Essay
Economics - to develop an understanding of what has happened in the economy of the United Kingdom over the last two years
The economy of United Kingdom has seen the slowest growth during the past three years and a few analysts are of the view that the interest rates will fall very soon. The reports from the office for national statistics have
8 Pages(2000 words)Essay
Inflation, Unemployment and Growth
2. The CPI measures, or estimates the rate of inflation. It is measured by calculating the price of selected goods purchased over time, against 100%. One advantage of using the CPI is the modification of measures it takes into consideration. They modify their
2 Pages(500 words)Essay
Inflation and Government Economic Policies
Supply-side factors, on the other hand, triggers rise in the price of commodities where the rise in price of critical raw materials makes producers
2 Pages(500 words)Essay
Let us find you another Essay on topic Why Do Market Economies Need Government United Kingdoms Economic growth, Inflation and Unemployment for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us