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Oh my GOD,,I found my blog!!!!!!!

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quantitative easing

Quantitative easing means putting more money into our economy to boost spending.
the targets of ‘quantitative easing’ ：

- keep the inflation stable and promote a healthy economy.

The bank of England use the interest rate to control inflation , and they aim is keep the interest at 2% but the target made by government . why the government and bank hope to keep the inflation stable ,this is because if the inflation below 2% or nearly zero, it reduce the the bank rate to boost spending and inflation. Also there is a still significant risk of very low interest rate, the bank can increase the quantity of money,so in other words, inject the money directly to the economy, the process of this also called quantitative easing. Because of injection of money the spending may increase because with the increase in lending the money to the seller or buyer they can spend more which is more than before, therefore the spending will increase and the inflation rate may grow up. Whereas why keep stable inflation is good? Because if the inflation is unstable, in terms of householder and companies which is very costly. and they make it hardly to see how price of individual good are changing compared with others.

-supply more money

why should more supplied?

Because the money supply needs to keep growing at the steady rate of the economy,and to ensure inflation remain close to the government 2% targets.

A country has a large current account deficit, what policy should be followed?

1. I think the government should do nothing, because it may be that under a free exchange rate system therefore the currency may face to depreciate. Also if a country has a strong economy it will attract FDI(foreign direct investment0) r loans into the capital account so the current account is balanced.
2. expenditure switching policies. Because these sort of policies reduce domestic spending on imports also the government can set the tariff or non tariff barriers to protect the domestic business. Also the government can subsidies to domestic producers, If the government recognise how important of exchange rate is helpful, they will set lower exchange rate or lower interest rate to encourage the domestic demand and the number of exports.
3. Expenditure reducing policies, this is means reduce spending on imports by reducing total spending such as deflationary fiscal policies, also they can set higher tax and spend lower money also deflationary if monetary. on anther hand the government can increase the interest rate which is reduce the demands, because less demand leading less expenditure.

review 4

Describe deregulation in the transport market
deregulation occurs when the government deliberately removes official regulations that act as a barrier to competition in a market. It is a supply side policy that facilities con testability.
the reason off deregulation is make the transport more efficiency and maintain the transport. For example, deregulation on local bus services in the transport act and then it becomes more efficiency.

Describe privatisation in the transport market.

Privatisation is the process by which a former publicly owned organisation or activity is sold off to the private. there are more information about privatisationhttp://shuimengqiu.blogspot.com/2009/11/privatisation.html

Explain the negative externalities due to increase the transport demand.

The negative externality is when the social cost exceed private cost. With the increase the transport demand, the pollution will be increase lead to reduce the transport sustainability.
there will be more congestion, so the risk of accidents will be growth. For freight transport, it will delay the delivery time and consuming products.

review3

Describe contestability in transport market and describe barrier to entry and there application to the transport market.



Generally if transport market is contestability, there is low barrier to entry.

for example the market of road haulage, couch services and rural bus services are get high con testability,therefore there are low barrier to entry. In the opposite, the air transport market has low contestability therefore it is high barrier to entry.

In monopoly market, there is high barrier to entry, because if a new business want to entry the set up cost is high, also there is some legal barriers for example the new transport market should have the licence from government.etc Thus in monopoly market there is low contestability.



In oligopoly market, the is lower barrier to entry than monopoly because a oligopoly market is a market dominated by a few larger firms. Therefore there is low contestablility as well.

However in a contestable market and a perfect competition market there is high contestability.

Because a contestable market is a market where is no barrier to entry and exit and the costs facing incumbent and few firms are equal.Also the meaning of perfect competition is a market structure with many buyers and sellers, free entry and exit an identical product. So according to the definition of both market it reflect both of them are no barrier to entry , therefore there are high contestability.



Outline the natrual monopoly case for transport

A natrual monopoly is a market situation where a monopo;osthas overwhelming cost advantage.

The natrual monopoly case for transport such as water, gas and electricity. For example there are two bus companies in a transport market, but both of them find put there is low profitability, but the bus company which exit in this market already will win the competition perhaps, because if there is already a bus company occur, the scale of this company is big, so the new entry bus company has low ability to get this conpetition so it will be difficuilt to entry real market. However if this new bus company has another transport market already and run it very well, it might be survive in this kind of competition.

review2

Explain how transport forecasts are made and why?
Transportation forecasting is the process of estimating the number of vehicles or travelers that will use a specific transportation facilityin the future.

the forecasts can basis on the figure,data and trend on transport. For example, the number of railway line prepare to use, the number of passengers satisfy by airport, or the number of ships calling on a seaport. To do transport forecasting, The first step is collection of data on current traffic. together with data on population, employment, cost etc. Feeding data on future population, employment, etc.

Explain the main ways in which transport sector can be described through the data.

For example, we have data which shows the how does consumer think about the comfortable of take bus, if there are more than 50% consumer think it is not good enough, the manager of bus company may make a forecast to solve this problem. In the opposite if the data shows there is more than 50% consumer think it is good, the manager of bus company will make a forecast which is how to keep it.

Outline economic of scale and application to transport.
Economies of scale: where average cost falls as production increases. They are happening because larger firms are able to lower their unit costs.
application to transport relevant the regulation and the transport market, for example barrier to entry, and one reason

of it is to entry a transport market should have licence from government.