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Economics Assignment范文:政府对经济的影响 Effects of the Government on the Economy(5)

时间:2017-12-27 15:40来源:www.ukthesis.org 作者:英国论文网 点击联系客服: 客服:Damien
 
Perfect competition can be characterized by many sellers and buyers, many products that are similar in nature and as a result of many substitutes, for example in a perfectly competitive market a single firm decide to increase its selling price of a good, the consumers can just turn to the nearest competitor for a better price, affecting any firm that increases its price to lose market share and revenues.
 
According to Stanley Fisher "An oligopoly is a market dominated by a few producers, each of which has control over the market. It is an industry where there is a high level of market concentration. However, oligopoly is best defined by the conduct (or behaviour) of firms within a market rather than its market structure".
 
Characteristics of oligopoly can be by competition other than price. Price wars , cutting prices in the market where all large firms tend simply to lead to lower profits, changing little market shares, instead , oligopolistic companies intend to charge relatively high prices but also compete through promotion and advertisement but existing firms can be safer from new companies entering the market because entry barriers to the market are high, for example existing successful brands have a number of a products considerably promoted in the other hand it will be difficult for a new company to establish its own new brand in the market.
 
This graph show us how important perfect competition is in the market in order to launch new product firms will need to follow some entry barriers and have some requirements and follow government policies such price control.
 
Task 5:
In this particular I am going to give an explanation and evaluation of what is meant by Keynesian, Monetarist economics:
 
According to Keynesian theory, "some microeconomic-level actions if taken collectively by a large proportion of individuals and firms can lead to inefficient aggregate macroeconomic outcomes, where the economy operates below its potential output and growth rate. Such a situation had previously been referred to by classical economists as a general glut".
 
Keynesian economics: during recession periods when aggregate demand is insufficient, monetary and fiscal expansion can boost demand, product and employment in 1930 Britain was partly pulled out the slump of Keynesian policy of government heavy spending on rearmament as the threat of war loomed however in the three decades after 1945 governments of both political parties in Britain attempted to implement the Keynesian policy in order to manage the level of aggregate demand but some of the policy did not work perfectly . In the decade after 1965 both inflation and unemployment grew fairly steadily which build up inflation proved to be a costly after effect Keynesian policies. Today we are more doubtful about the success of the activist period of 1950 and 1960.(责任编辑:BUG)


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