The article discusses the Chinese state's initiative to increase the minimum income tax threshold from 2000 yuan. This was done in order to 'boost domestic demand' - a rise in disposable income increases consumer expenditure in theory and thus boosts aggregate demand. The authorities are however cautious of the increase in income leading to inflation - this suggests that the authorities deem the Chinese economy to be near full employment of resources (according to the Keynesian outlook).

The article highlights the uncertainty central bank officials must face when directing the implementation of monetary policy. In this particular case, US Fed bank officials are unsure as to the future state of the economy: rising growth and thus inflation or staggered growth. The Fed eventually decided to keep interest rates at near 0 rates as they believe exogenous shocks such as the events in the middle east and natural disasters would maintain economic uncertainty and thus would curb any underlying inflationary pressures.

The article discusses the stability and growth Pact that regulates EU member states' budgets, and its impact on fiscal policy on member nations. Another dimension of fiscal policy is its political implications, and the article articulates this dilemma. Particularly in the case of the EU, where one government's spending has an effect on all other countries as the currency is common, a government's fiscal policy adjustments have political impacts. thus, aside from the economic implications, governments must consider the political ramifications of their actions before implementing fiscal policy.

The article discusses the Chinese government's intervention in the banking industry to avoid a 'boom and bust' cycle. Banks were seen to be lending large sums of money, increasing aggregate demand in the economy and 'overheating it' causing rapid inflation. The fear was that this inflation would then in turn lower consumer sentiment and cause a 'bust' in the cycle. The policies set to curb this lending were designed to reduce the sudden effect of a bust.

The article discusses a higher than expected growth in the level of inflation, growing 2.4% in January alone. The rise is attributed to a rise in food prices due to the loss of harvest during the smog wildfire issues of summer 2010. Under election pressure, the finance minister has stated that more compensation would be given to low-income earners if inflation continued to rise unimpeded.

The article discusses the reason why India's private sector employment is relatively low given the high economic development and prosperity. Wages are said to not have risen to levels suggested by per capita income figures and this has been attributed to the plethora of cumbersome laws and regulations that govern Indian labour markets. Due to the inflexibility, private sector employers respond by not hiring too many workers in the first place due to fear of disputes. At least 45 laws exist at the national level, and up to 4 times as many at the state level. The author cites a change in government's attitudes to labour market as the remedy to India's unemployment.

The article discusses Scotland's high literacy rates. As the article itself states 'Literacy levels are a very important measure of the social and economic well-being of any society'. 73 % of Scots have 'internationally recognized' literacy skills from the article. This provides a good indication of Scotland's development. Literacy rates are also key determinants of economic growth (plentiful and educated workforce more likely to be productive and contribute to economic growth) and thus reflects well upon Scotland's economic and social potential.

This article indicates that economic growth in India will slow down to a little over 8 % in fiscal year 2012. This is in part due to a spike in interest rates in order to curb inflation. An increase in interest rates attracts saving and deters investment (the cost of borrowing is higher). In addition to this, the increased saving reduces the amount of expenditure in the economy thus contributing to slower economic growth. The reduction is also attributed to a slowing manufacturing and services sector (which is expected to have strong momentum in 2011 but slower growth in 2012).

The article raises an interesting point regarding the use of public good expenditure as a stimulant for the economy and job creation - thus creating an overall positive benefit for society. It also discusses expenditure conflicts between provision of different types of infrastructure e.g. roads or highways as transportation infrastructure. Ultimately, it states that the US should spend more on public goods oriented around job creation to benefit the economy.

The article quantifies the external costs of smoking in addition to the private costs imposed upon the smoker. It cites a cost of $150 for cleaning costs (for cars dirtied by ash), with up to $1000 for high-end models. Cleaning a house plagued by smoke is estimated to cost up to $2000. This does not include the costs associated with healthcare payments that need to be paid to employees as part of coverage plans. Furthermore, it is estimated that $96.7 billion is spent on private and public healthcare pertaining to smoker-related illnesses. These negative externalities are not accounted for in the price of a pack of cigarettes (the article states a price of $4-$5 for a single pack) and thus results in an allocative inefficiency - smoking is grossly overconsumed by society.

The article highlights certain industries/producers that succeed during a recession, all related to the idea of negative income elasticities or inferior products. Examples from the article include discount retailers such as Walmart, 'sin industries' e.g. cigarettes, selected services e.g. renovation (people focus on what they have and try to improve it rather than purchasing something new). The article also praises firms that tighten up costs and expand on 'core product' ranges and using 'vast economies of scale' to provide affordable goods to consumers.

This article illustrates the differing prices of Apple's iPad devices in various countries. It cites reasons such as proximity to manufacturing base, average GDP per person as reasons for the disparity in prices across the globe. The article implies that the elasticity of iPads would be different in different regions of the world. The iPad as a device is interesting in the study of elasticity as it is akin to other forms of technology that are constantly developing. With more and more technology developing, elasticities for technological products are becoming more and more elastic due to the great number of substitutes available.

The article discusses price controls (ceiling prices) as a remedy for rising inflation in certain Asian economies (all above 4 %). The ceiling price was employed on food prices that were the main cause for rising inflation. The price controls were an alternative to raising interest rates which would raise the value of the local currencies by attracting foreign capital. The article discusses the feasibility of price controls as short term vs long term solutions. It states that price controls reduce incentives and efficiency in the long run by not rewarding producers appropriately. Nevertheless, they are effective in this particular case since the rise in price of food (pork rose 60 %) was mainly attributed to supply irregularities. If the price rises were caused through excessive demand, then price controls would perhaps not be as beneficial in the short run since the likelihood of a black market developing/smuggling would be much higher.

The article states that Verizon's revenue dropped 2.9% in the third quarter of 2010 to $26.5 Bn. Although this surpassed analysts expectations, it was poor in comparison to AT&T's (Verizon's rival) earnings for the third quarter. The success of AT&T in this quarter was attributed to sales of the iPhone in the wireless mobile devices market. Verizon has therefore opted to shift supply to concentrate more on the growing smartphone market, investing heavily in 4G data transmission infrastructure to compete with AT&T. A new tiered pricing model is also being introduced to entice customers to purchase smart phones from Verizon. This aptly demonstrates the price mechanism as a signal to producers in a market economy - if competitors are supplying a profitable product/service, other firms in the industry will also shift supply to produce that product/service to attract high profits.

The article discusses the price mechanism as a signal for allocation of resources in two markets - consumers goods and stock market. A rational perspective would assume that as demand rises, suppliers are attracted to the particular product as they see incentive for profit and thus supply extends and prices rise. This then has the opposite effect as since prices are high, demand contracts. This self-correcting mechanism is in place for the market of consumer goods, as the article discusses. Eventually, price will return to equilibrium. However, in the case of stocks, as prices of stocks rise, investors are more attracted to the stock as they see incentive for capital gain. Thus demand extends, contrary to the rational model observed in the market for consumer goods. Nevertheless, the article provides supports the notion that as demand rises, prices rise and more of that particular good/service is supplied to the market.

This article provides an interesting perspective into the fluctuation in price levels between different domestic routes in the US. As demand for a particular route goes up, so does price of airfare that serves that route. As a result, an increasing number of airlines allocate resources to serve that route, and as a result of competitive pressure, prices go down. This results in volatility of prices, and a constant shift in the allocation of resources based on price levels between routes. For instance, the route between Atlanta (ATL) to Las Vegas (LAS) is said to have 2,472,916 price changes. This reflects upon the popularity of this route for domestic travel within the US.

While the economic definition of 'scarcity' may seem obscure to this particular scenario, on closer inspection we find that the definition of 'unlimited needs/wants but limited resources' can indeed be applied to the scarcity of jobs as a result of the recession. The 'want' in this case is labour seeking employment and the limited resource is the relative liquidity of business. While this article is generally about foreclosure and its effect on the economy, I feel it demonstrates a highly relevant application of economic scarcity in the current environment.