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Questions and Answers
What was one of the significant causes of the 2008 Recession?
What aspect of the economy was particularly impacted by the Covid-19 pandemic?
How did Brexit affect Irish businesses?
What is one learning point emphasized for future economic stability?
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What occurred due to the financial impact of the Covid-19 pandemic on government revenue?
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What does microeconomics primarily focus on?
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Which of the following best describes a normative statement?
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What was one significant factor contributing to the Celtic Tiger's growth?
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What is the primary concern of macroeconomics?
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Which economic perspective advocates for minimal government involvement in markets?
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What characterizes a positive statement in economics?
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Which year marks Ireland's joining of the European Economic Community?
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Which of the following was NOT a factor that contributed to the Celtic Tiger?
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What was a significant consequence of the 2008 Recession for Irish banks?
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What primary challenge did Brexit introduce for Irish businesses?
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In what ways did the Covid-19 pandemic impact government spending in Ireland?
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What fiscal strategy is suggested for ensuring future economic stability based on past lessons?
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What role does investment in education play based on past economic learning?
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What is the primary focus of microeconomics?
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Describe the difference between positive and normative statements in economics.
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What role did T.K. Whitaker play in shaping the Irish economy?
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What economic period is referred to as the Celtic Tiger?
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Identify two factors that contributed to the Celtic Tiger era.
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How do Keynesian economists view the role of government in the economy?
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What were the primary goals of free market economists?
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What was one key outcome of Ireland's joining the European Economic Community in 1973?
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Study Notes
What is Economics?
- Economics is divided into two subfields: Microeconomics and Macroeconomics.
- Microeconomics focuses on individual parts of the economy, such as the behavior of households and firms, and how they interact.
- Macroeconomics looks at the economy as a whole, including government involvement and economic indicators.
Definitions & Terms
- Demand: Willingness to pay for a good or service.
- Supply: Total amount of a good or service available.
- Positive Statements: Objective statements that can be tested and verified.
- Normative Statements: Subjective opinions about how the world should be.
Economists
- Keynesian Economists: Believe in government intervention to stabilize the economy, such as minimum wage and interest rate adjustments.
- Free Market Economists: Emphasize self-regulation and oppose government interference in the economy.
Economic History of Ireland
- 1922 - 1939: Independence from UK.
- 1958: Economic Development Report by T.K.Whitaker promoted free trade and growth.
- 1973: Ireland joined the European Economic Community (EEC).
- 1990 - 2000: The Celtic Tiger era marked rapid economic growth.
- 2008 - 2012: The Financial Crisis.
- 2012 - 2019: Economic Recovery.
The Celtic Tiger
- Period of rapid economic growth in Ireland from the mid-1990s to late 2000s.
- Driven by foreign investment, skilled workforce, and favorable tax policies.
What Brought About the Celtic Tiger?
- Foreign Investment
- Educated Workforce
- The European Union
- Government Policies - Social Partnership
The 2008 Recession
- Global financial markets faced turmoil due to subprime lending in the US.
- Confidence in inter-bank markets collapsed, leading to the failure of Lehman Brothers.
- Irish banks were severely affected, requiring a bailout.
What Caused the 2008 Recession?
- Demand for Housing
- Reliance on the Construction Sector
- Poor Bank Practices
Brexit
- The UK, Ireland's closest trading partner, voted to leave the single market in 2016.
- Years of uncertainty and negotiations followed, focusing on trade in and out of Northern Ireland.
- Irish businesses who trade with the north and the UK experienced uncertainty.
The Covid-19 Pandemic
- The pandemic triggered a dual crisis for the Irish economy: a health emergency and a significant economic shock.
- Sectors like hospitality, aviation, and entertainment were heavily impacted due to decreased demand and event cancellations.
- Government revenue plummeted, while spending surged for social welfare payments and healthcare costs.
- The government implemented financial support for businesses.
- Uncertainty caused many companies to defer or cancel investment decisions.
Learning From the Past
- Sensible Fiscal Policies: Maintaining a balanced budget and minimizing government debt.
- Embrace Export Markets: Increasing focus on exporting Irish goods and services.
- Household Debt: Reducing household debt levels to enhance financial stability.
- Investment in Education: Focusing on education and skills development to build a competitive workforce.
- Monitor Credit: Maintaining responsible lending practices to prevent financial crises.
Economics: Micro and Macro
- Microeconomics focuses on individual markets, households, firms, and their interactions.
- Macroeconomics focuses on the larger economic picture, analyzing government involvement and economic indicators.
Demand and Supply
- Demand refers to a consumer's desire to purchase a good or service at a specific price.
- Supply represents the total quantity of a good or service available to consumers.
- Macroeconomics considers aggregate demand (AD) and aggregate supply (AS), which represent the overall demand and supply across the entire economy.
Positive and Normative Statements
- Positive statements are objective and can be tested using evidence.
- Normative statements are subjective opinions about what should happen.
Economic Schools of Thought
- Keynesian economists believe in government intervention and public sector involvement to stabilize the economy.
- Free market economists advocate for minimal government intervention and rely on market forces to regulate the economy.
Economic History of Ireland
- 1922 - 1939: Ireland gained independence from the UK.
- 1958: The Economic Development report by T. K. Whitaker promoted free trade, leading to economic growth.
- 1973: Ireland joined the European Economic Community (EEC).
- 1990 - 2000: The Celtic Tiger era witnessed rapid economic growth.
- 2008 - 2012: The Financial Crisis hit Ireland hard.
- 2012 - 2019: The Irish economy experienced recovery.
The Celtic Tiger Era
- The Celtic Tiger was a period of strong economic growth in Ireland from the mid-1990s to the late 2000s.
- This growth was driven by:
- Foreign Investment: Attracted by favorable policies and a skilled workforce.
- Educated Workforce: Ireland's educated population contributed to economic success.
- European Union Membership: Access to the single market facilitated trade and growth.
- Government Policies: "Social Partnership" fostered collaboration between government, unions, and businesses.
The 2008 Recession
- The global financial crisis of 2008 impacted Ireland severely.
- Key contributing factors were:
- High Demand for Housing: Leading to a construction boom.
- Overreliance on the Construction Sector: Leaving the economy vulnerable.
- Poor Bank Practices: Including risky lending practices (subprime lending) and inadequate regulation.
Brexit
- The UK's decision to leave the EU in 2016 created uncertainty for Irish businesses, particularly those trading with Northern Ireland and the UK.
The COVID-19 Pandemic
- The pandemic presented a dual crisis for the Irish economy:
- Health Emergency: Public health measures affected economic activity.
- Economic Shock: Tourism-dependent sectors were hit hard.
- The government:
- Increased spending: On welfare payments and healthcare.
- Provided financial support to struggling businesses.
- The uncertainty impacted investment decisions and economic growth.
Lessons from the Past
- Key learnings from Ireland's economic history:
- Sensible Fiscal Policies: Responsible government spending is crucial.
- Embrace Export Markets: Expanding export capabilities strengthens the economy.
- Address Household Debt: High levels of debt can destabilize the economy.
- Invest in Education: A skilled workforce is essential for competitiveness.
- Monitor Credit: Sound financial regulation is crucial for economic stability.
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Description
Explore the foundational concepts of economics, including microeconomics and macroeconomics. This quiz covers key definitions, terms, and notable economic theories related to individual behavior and overall economic health. Understand the roles of various economists and gain insights into the economic history of Ireland.
