3.3 Applying Economic Power: Regulation and Markets

The component parts of an economic system interact with each other in regulated markets, applying economic power in negotiations

3.3.1      The Framework of Economic Regulations

required for the health, efficiency and legitimacy of the economy

3.3.2      Supply and Demand

competition drives a price that creates a supply-demand equilibrium

3.3.3      The Labour Market: Setting the Level of Wages Paid

wage negotiations: setting wage levels that employers can afford

3.3.4      Financial Markets

banks, loans, interest rate, speculation, inflation, currency exchange

3.3.5      Deviations from Classical Economics

unpredictability, irrational behaviour, external events, restrictive practices

3.3.6      Government Control of Markets

governments sometimes manipulate markets, inefficiently, for political reasons

3.3.7      Politically Targeted Economic Interventions

targeted governmental economic interventions impose costs elsewhere

3.3.8      Prudent Economic Management: Macroeconomic Policies

how governments manage spend and taxation, inflation, currency

3.3.9      Economic Accountability

politicians are accountable to the public for managing the economy

There are geographical considerations, and a hierarchy of subsidiarity, in applying economic power – as described in the next segment



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