Absolute Advantage

According to Adam Smith, who is regarded as the father of modern economics), countries should only produce goods that they have an absolute advantage in. A country is said to have an absolute advantage if the country can produce a good at a lower cost than another. Furthermore, this means that fewer resources are needed to provide the same…
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The Easterlin Paradox

The Easterlin Paradox was theorized by Professor Richard Easterlin, who is an Economics Professor at the University of Southern California. In his paper titled, "Does Economic Growth Improve the Human Lot? Some Empirical Evidence", he concluded that a country's level of economic development (i.e. the increase in the standard of living) and level of…
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Unemployment in India

Unemployment in India is a complex problem with numerous overlapping and intertwined causes; however, it is possible to identify several key causes. This article will attempt to describe and outline these causes, which vary from macro-level factors (e.g. overall slow economic growth as well as population increases) to more micro-level factors (e.g.…
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Tariffs

A tariff is a type of trade barrier imposed by a government that acts as a tax on imports. The tariff may be in the form of a specific or ad valorem tax. Tariffs raise the price of the imported good to lowers its consumption. Tariffs encourage consumers to pick the local option. A specific tax is imposed on each unit, i.e., $0.50 on a pack of…
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Capitalism: Pros and Cons

Capitalism is an economic system where private companies own the four factors of production. The four factors are land, capital, land/natural resources, and entrepreneurship.Characteristics of Capitalism In a capitalist society, companies and individuals own the different factors of production. They receive rent, interest, profit, and wages…
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