economists basics

Pro:

• helps to protect the environment by reducing harmful emissions

• Creates a market system that encourages innovation

• Promotes economic efficiency by assigning a cost to emissions

Cons:

• Implementation can be complex

• Market volatility may lead to uncertainty

• The cost of permits might have a greater. Impact on specific industries

1. • economic downturn/ recession - consumers tend to cut back on Luxury products

   • Technological shifts - advancement in technology / failing to adopt

   • changing consumer preferences - environmental issues

2. • Government: create favorable environment by regulatory support (subsidiesing) and developing infrastructure for electric cars

   • Privates: Innovation/ Adaption, market Research and collaboration (with tech companies)

1. fundamental deduction making Of weather producing (internally) or buying (externally)

2. Cost efficiency —> billiger external zu produzieren

3. Temporary needs —> wenn man ein one time Projekt hat

4. Variable demand —> wenn der demand sehr variable ist, ist es leichter von dritten zu kaufen

5. Expertise —> wenn ein Produkt eine gewisse expertise braucht

6. Cost analysis, competencies, quality (Faktoren die bei der Entscheidung einbezogen werden sollten)

1. Short run

   • Consumers benefit from lower prices

     • Sudden increase in demand löst Preiserhöhungen aus

   • (Producers) increased profit if demand increases or production cost decreased

     • Producers face more competition - reduce in profit

2. Long run

   • Consumers continue to benefit from lower prices

     • If market becomes less competitive - price will increase

   • Producers are motivated to innovate and increase efficiency

     • might exit the market if there is excessive competition

• deadweight loss refers to the inefficiency and economic welfare reduction caused by the lack of competition

  • antitrust laws to prevent monopolies and promoting competition

  • Regulation of prices - to ensure that consumers are charged fair prices (reducing deadweight loss)

  • Promoting competition

  • Public ownership - government takes control of the industry

• they refer to the cost advantages that businesses achieve as their production levels increase

  • Cost per unit of output decreases as the scale of production increases.

  • Allows firms to reduce their average costs and increase profitability

• Barriers to entry: the cost advantages create a barrier

• Market power: able to negotiate favorable deals with supplier

• Technical advancements: increases competitive advantage making it hard for smaller rivals to keep up or enter the market

• Social, political and economic changes

  • invest in education (especially girls)

  • Infrastructure development (building roads etc - leads to mehr jobs

  • Promote good governance (corruption free)

  • Invest in healthcare (healthy populations are more productive)

  • Social safety nets

Germany

+ they bring valuable Skills, diversity and culture

- lower wages (because of increase in number in workers)

Romania

+ Economic boost transfers from Germany to Romania (families helping each other out)

- loss of labor

• interest rate reduction - to encourage spending and investment

• Increased government spending - on infrastructure projects, education & healthcare (boosts demand, creates jobs and stimulates economic growth)

• Cutting taxes for low and middle income households (encourages consumer spending)

• Providing targeted financial support to sectors severely affected by the recession

• Printing more money Leads to increased demand in the economy potentially causing inflation

• Even if refinancing rate is low, additional injections of money might not have a significant impact

• Rapidly increasing the money supply can lead to asset bubbles and financial instability

Alternative monetary tools

• central banks can buy government bonds and other financial assets to inject money into the economy (quantitative easing)

• central banks can implement targeted lending programs to provide cheap credit

Exchange rates can overshoot their expected long-run level due to market expectations and speculation. It happens when a shock leads to currency depreciation, causing the exchange rate to temporarily fall below the expected level. Eventually, as the economy adjusts, the exchange rate moves back towards its equilibrium.