Economics Explained

Consumers and producers interact using money. It enables the payment of wages and the buying of goods. It may surprise you to realise how critical it is that the Reserve Bank ensures that there is just the right amount of money in circulation. Too much money and consumer demand could cause prices to rise; too little and the economy could slump. Some activities increase the amount of money in circulation and others decrease it. A balance is necessary for the economy to run smoothly.
The Government uses Fiscal and Monetary policy to keep the economy on a steady course, with the aim of stable prices and low unemployment. This is carefully explained with numerous examples, questions, and answers to ensure you understand.
An often hotly debated topic is “when and by how much should the Government act?” That is harder to answer and so the explanation delves into long and short run equilibrium. Graphs are included as well as an explanation of “the natural level of employment”.