Economic aims of conservatives

How we know, in this May, in UK will be new elections of new premier minister. The is a main candidate who is more likely to win,David Cameron. He is a chairman of Conservative party and he is more likely to win against a representative of Liberal party Gordon Brown, because his economic aims look very efficient.

So, here some aims of David Cameron and Conservative party as a whole.

1) Ensure macroeconomic stability, conservatives want to safeguard Britain's credit rating with a credible plan to eliminate a large part of deficit over a Parliament. And consevatives point out that, their fiscal policy will seek possibilities to help to keep interest rates lower for longer. The Bank of England is going to continue to target 2 per cent of CPI (Consumer Price Index) and will use it in new role to preserve financial stability.

2) Create a more balanced economy. How I understood, conservatives want to create better conditions for higher exports,investments and saving as a share of GDP.

3) Conservatives want give jobs for unemployment people and reduce the number of children in workless households.

4) They want to make Britain for business, to improve Britain's international rankings for tax competitiveness and business regulation.

5) Conservatives want to raise productivity growth in the public sector,to deliver better schools and a better NHS.

6) Also, conservatives want ot reduce UK greenhouse gas emissions.

Privatization

I have read an article about privatization and the reasons of it.

So, first of all, privatization it is a process of transfering ownership of a business or public service from public sector to the private sector. if we look on privatization better, we can understand, that actually can not guarantee the progress in economics,but privatization increase rivalry on a market.

Also I have known some information that, there are three types of privatization: Share issue privatization, Asset sale privatization and Voucher privatization.

Share issue privatization it is a privatization,where selling shares on a stock market

Asset sale privatization it is a privatization where selling entire firm to a strategic investor, usually by auction.

Voucher privatization it is a privatization where sharing of ownership are distributed to all citizens, usually for free or at a very low price.

Actually privatization it is a positive thing for government, because privatization increase rivalry on the market, therefore economic growth will increase,what is good for a country.

Chapter 6, definitions

Fiscal policy-the taxation and spending decisions of a government.

Monetary policy-central bank and/or government decisions on the rate of interest,the money supply and the exchange rate.

Supply-side policies-policies designed to increase aggregate supply by improving the efficiency of labour and product markets.

Relationary:of policy measures designed to increase aggregate demand.

Deflationary: of policy measures designed to reduce aggregate demand.

Discretionary fiscal policy-deliberate changes in government spending and taxation designed to influence aggregate demand.

Automatic stabilisiers-forms of government spending and taxation that change automatically to offset fluctuations in economic activity.

Economic cycle-the tendency for economic activity to fluctuate outside its trend growth rate,moving from a high level of economic activity (boom) to negative economic growth (recession)

Progressive tax-a tax that takes a higher percentage from the income of the rich.

Regressive tax-a tax that takes a greater percentage from the income of the poor.

Recession-a fall in real GDP over a period of six months or more.

Human capital:education,training and experience that a worker,or group of workers,possesses.

Tariff-a tax on imports.
Quota-a limit on imports.

Occupational immobility of labour-difficulty in moving from one type of job to another.

Protectionism-the protection of domestic industries from foreign competiton.

Voluntary export restraint (VER)-a limit placed on imports from a country with the agreement of that country's government.

Balance of payments

I am going to tell you about some information about balance of payments. Balance of payments it is a record of money flows coming in and going out of country.

Balance of payments it is a monetary deals between country with another countries of the world. These deals include imports and expports of goods, services or financial transfers. Balance of payments is making deals for a specific periods and they are happening in a single currency, usually the domestic currency for the country concerned. Balance of payments usually is using for imports and exports, for example: if a country is importing is more than exporting, it will be a trade balance deficit.

Int he past, governments emphasised on achieving a satisfactroy balance of payments positions, particularly on trade in goods and services. But nowadays government may not be concerned on the short term of expenditure which exceeds export revenue. And for government is better to see an increase in competitiveness of their producers, because it will maintain aggregate demand and output high in the economy.

Economic growth

I have read an article about economic growth and why governments try to achieve economic growth.

First of full, economic growth it is an increase in real GDP and an increase in productive capacity, which shows us the maximum output that the economy can produce.

Why governments want to achieve economic growth? The most important reason for that is that government wants to gain a benefit from it and it is including increasing material living standards. And government point out that economic growth has to include stability, because with stability, economic growth will be achieved.

For government of the country it is very important to have a sustainable economic growth, because it will stant for all the time, another words-stable economic growth, which can be maintained year after year and that can be enjoyed generation after generation. And I think that economic growth it's a really important thing for country, because in countries where economic growth is high, therefore conditions of living are much better and unemployment is lower.For achieving economic growth government should avoid the costs which arise from a negative output gap, such as unemployment and positive output gap, such as inflation.

Definitions

Economic growth: in the short run, an increase in real GDP, and in the long run, an increase in productive capacity, that is, in the maximum output that the economy can produce.


Unemployment: a situation where people are out of work but are willing and able to work.


Labour force: the people who are employed and unemployed, that is, those who are economically active.

Economically inactive: people of working age who are neither nor unempoyed.

Deflation: a sustained fall in the general price level.

Balance of payments: a record of money flows coming in and going out of a country.

Elastic: responsive to a change in market conditions.

Inflation rate: the percentage increase in the price level over a period of time.

Trend growth: the expected increase in potential output over time. It is a measure of how fast the economy can grow without generating inflation.

Full employment: a situation where those wanting and able to work can find employment at the going wage rate.

Hyperinflation: an inflation rate above 50 per cent.

Nominal GDP: output measured in current prices and so not adjusted for inflation.

Informal economy: economic activity that is not rec[orded or registered with the authorities in order to avoid paying tax or complying with regulations, or because the activity is illegal.

Demerit good.(Mcdonalds)

I am going to tell you about demerit goods and Mcdonalds company.

So, firts of full, demerit good it is a good where consumption of goods is more harmful than it's actually realised, therefore when people consume product, probably they have a harm on their health. Nowadays the most urgent demerit good it is a burger, fast food etc. Every day in many countries in the world people use fast food and the don't recognize, that it's really bad for their health.

Mcdonalds it is a main representative of demerit goods, and it's such a global company, it exists in many countries. So, Mcdonalds it is american company which created in 1940, it became the most popular food since 1947. Nowadays it is the largest food company in the world, their revenue makes up about 22 billion american dollars for 2008. It looks absolutely amazing, because many people know, that mcdonald burgers make a big harm on their health, but they still continue consume this products. Government in many countries try to decide this problem with obesity, for example, in USA, it becomes a political problem, people don't understand that they lose their health and pay money to this company. In some countries government banned Mcdonald cafes and restaurants, for example in my home country Kazakhstan, president has made a law, that in Kazakhstan won't be any Mcdonalds cafes, and I think that it is a great decision to avoid obesity. Also there is another problem, many years ago Mcdonalds company was a monopoly company, but few years ago, there appeared another fast food companies such as Subway, King Burger. It's a problem, because people have substitutes to one fast food company for another fast food company, if Mcdonalds make high prices on burgers, people will go to King Burger and over and over will be becoming fatty. But I think that the main problem in people, not in fast food companies, because people like this food and it is cheap food that's why people eat in fast food cafes. So, I think that government don't have to ban fast food companies, but maybe government can reduce create fast food cafes on every corner.