Keyword Analysis & Research: effects on economy


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What is effect of salary increase on economy?

With a higher money supply, consumers have more spending power, so the demand for goods increases. An increase in demand for goods then increases the price of goods in the broader market. Companies charge more for their goods to pay higher wages, and the higher wages also increase the price of goods in the broader market.

How do externalities affect the economy?

Economists use the term "externality" to describe ways in which economic activity affects parties that aren't directly involved in the activity. "Negative externalities" are harmful effects on others. Say you buy electricity from a utility company whose power plant pollutes the air.

What are the bad effects of an open economy?

Disadvantages of Open Economy to a country are as follows: 1. Risk Exposure: Open economies are interdependent. And this exposes them to certain unavoidable risks. Disturbances like trade cycles, and fluctuations in income, prices and employment etc., originating in one economy, spread to other economies also.


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