Price-cap regulation was abandoned in the gas and electricity industries because the regulator (Of gem) felt that there was sufficient competition. Consider whether this was a wise decision.
Answer to relevant QuestionsExplain how equilibrium would be restored in the circular flow of income if there were a fall in investment.Why will investment affect both actual (short-term) growth and the long-term growth in potential output? What will be the implications if these two effects differ in magnitude?Explain how the current account of the balance of payments is likely to vary with the course of the business cycle.What explanations can you give for the increase in both unemployment and inflation in the 1970s?How does money aid the specialization and division of labor?
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