-Larger export market (for both goods and services)
-Free movement of people = easier to find workers.
-Access to capital from rest of EU
-Access to single market makes country attractive for non-EU FDI (e.g. Japanese cars in the UK)
The upward-sloping section: when the economy is nearing full capacity.
D
If a country grants another country a special favour (such as a lower customs duty rate for one of their products), the country has to do the same for all other WTO members.
The Inelastic section: where the economy is at full capacity (full employment)
-An injection into the circular flow means people buy goods.
-Businesses provide goods and pay workers to produce them.
-People take their payment for working and spend on more goods.
-The money goes around and around until it is all leaked out.
-The end effect on the economy is greater than the original injection (i.e. it's multiplied)
→ Outward migration
→ Ageing population
→ Decreased factor mobility
→ Destruction of infrastructure
→ Increased regulations
Production levels in the long run do not depend on price. They only depend on the quality and quantity of factors of production.
To adjust for cost of living differences between countries.
The percentage of a change in income that is devoted to Consumer Expenditure.
i.e. If you increase income by £10, what % goes towards Consumer Spending?