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Pros and Cons of Introducing a National Minimum Wage

Question

Analyse how an increase in interest rate could reduce total demand in an economy.

Category:

Macroeconomic Factors and Policies

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Preview Answer

I. 🍃Introduction
- Explanation of the topic
- Importance of understanding the advantages and disadvantages of a fall in price

II. Disadvantages of a fall in price
- Dependence on the product in the economy
- Price inelastic demand
- Less profits and investment
- Less export revenue
- Domestic firms losing out
- Demerit goods
- Deflationary situation

III. Advantages of a fall in price
- Size and duration of the fall
- Elastic demand
- Increase in choices and affordability
- Lower cost of production
- Merit goods
- Affordability for low-income groups
- Increase in productivity and government subsidies
- Improved international competitiveness

IV. 👉Conclusion
- Summary of the advantages and disadvantages
- Importance of considering the context of the fall in price
- Implications for the economy and consumers.

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