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
negotiating a wage that employers can afford and that workers can accept
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