OPEC as a cartel

In what way does OPEC resemble a cartel? How successful is it?   A ‘Cartel’ is defined as an association of manufacturers and suppliers. Its purpose is to maintain high prices and to restrict competition. In that sense OPEC (Organization of Petroleum Exporting Companies) is not just a cartel but an influential and successful one. It resembles … Read moreOPEC as a cartel

OPEC’s Control on Oil Prices

How does OPEC control oil prices?   Organization of the Petroleum Exporting Countries (OPEC), remains an important force behind the oil prices globally. There are several mechanisms through which it can influence the prices of oil. However, primarily it is its control over its member countries that allows the organization to influence the prices. It sets … Read moreOPEC’s Control on Oil Prices

Division of labor: Adam Smith

The Wealth of The Nations by Adam Smith: Division of labor

 

The Wealth of The Nations by Adam Smith was published in 1776. Book 1 of ‘The Wealth of Nations’, deals with Division of labor. Smith’s book had been published at the dawn of the Industrial age. However, it was also the time when labor conditions were very bad. Around the world, the workers had to face poor working conditions. According to Smith, the roots of economic development lay in the Division of Labor. Increased division of labor meant increased specialization. Division of labor meant that the same person could not work on different tasks. Bigger tasks were divided into their smaller components. Workers had to focus on these smaller components and not on the one entire process. This also meant that the workers were growing more skilled at their jobs by focusing on any single task. Each worker could be an expert at his job.

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Federal Budget Deficit and Federal Debt

BUDGET DEFICIT Budget deficit means a financial condition where the spending is above the earnings or revenue. The term is used in the context of the government and is measured generally over the period of one year. Budget deficit implies the difference between the government’s income and expenditure. Expenditure roughly includes everything the government buys … Read moreFederal Budget Deficit and Federal Debt