» supply and demand

When dealing with different currencies it is important to be able to determine the relative value of each of them. Purchasing power parity (PPP) is a method for determining this comparative value. The theory behind PPP has been around since sixteenth century. It is based on the idea that if markets are effective, there will be the same price for items even if they are in different geographical locations – this is called the law of one price. Where differences do occur in price it can be due to barriers in trade and taxes. In reality there can be a huge difference between the prices of goods in different countries. These prices will also be impacted by things like level of supply and demand. Read the rest of this entry »

Free trade is an issue of great importance for those in business and consumers around the world. It refers to the right to sell goods and services around the world without any hindrance. With free trade the only thing determining the price of things will be supply and demand factors. As well as goods and services, free trade can also refer to the ability of labor to move freely around the world. The issue of free trade is a highly contentious one, and both sides of the debate can provide persuasive arguments for their position.

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Microeconomics is focused on the micro level of the economy – the individual parts that influence the economy such as supply and demand as well as competition.  A study of microeconomics can help people have a much better understanding of the world around them. For those who are interested in learning more about this fascinating subject there are some great books to help them do this. Below is a selection of some works that may be of interest; although this is in no way claims to cover all the worthy books on this subject.

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