A Primer on the Price Elasticity of Demand

Price elasticity of demand (sometimes referred to simply as price elasticity or elasticity of demand) measures the responsiveness of quantity demanded to a price. The formula for price elasticity of demand (PEoD) is: PEoD (% Change in Quantity Demanded)/(% Change in Price) (Note that price elasticity of demand is different from the slope of the demand curve, even though the slope of the demand curve also measures the responsiveness of demand to price, in a way.) 2:48 Watch Now: How Does Price Elasticity of Demand Work? Calculating the Price Elasticity of Demand You may be asked the question Given the following data, calculate the price elasticity of demand when the price changes from $9.00 to $10.00. Using the chart on the bottom of the page, well walk you through answering this question. (Your course may use the more complicated Arc Price Elasticity of Demand formula. If so, youll need to see the article on Arc Elasticity) First, well need to find the data we need. We know that the original price is $9 and the new price is $10, so we have Price(OLD)$9 and Price(NEW)$10. From the chart, we see that the quantity demanded when the price is $9 is 150 and when the price is $10 is 110. Since were going from $9 to $10, we have QDemand(OLD)150 and QDemand(NEW)110, where QDemand is short for Quantity Demanded. Thus we have: Price(OLD)9Price(NEW)10QDemand(OLD)150QDemand(NEW)110 To calculate the price elasticity, we need to know what the percentage change in quantity demand is and what the percentage change in price is. Its best to calculate these one at a time. Calculating the Percentage Change in Quantity Demanded The formula used to calculate the percentage change in quantity demanded is: [QDemand(NEW) - QDemand(OLD)] / QDemand(OLD) By filling in the values we wrote down, we get: [110 - 150] / 150 (-40/150) -0.2667 We note that % Change in Quantity Demanded -0.2667 (We leave this in decimal terms. In percentage terms this would be -26.67%). Now we need to calculate the percentage change in price. Calculating the Percentage Change in Price Similar to before, the formula used to calculate the percentage change in price is: [Price(NEW) - Price(OLD)] / Price(OLD) By filling in the values we wrote down, we get: [10 - 9] / 9 (1/9) 0.1111 We have both the percentage change in quantity demand and the percentage change in price, so we can calculate the price elasticity of demand. Final Step of Calculating the Price Elasticity of Demand We go back to our formula of: PEoD (% Change in Quantity Demanded)/(% Change in Price) We can now fill in the two percentages in this equation using the figures we calculated earlier. PEoD (-0.2667)/(0.1111) -2.4005 When we analyze price elasticities were concerned with their absolute value, so we ignore the negative value. We conclude that the price elasticity of demand when the price increases from $9 to $10 are 2.4005. How Do We Interpret the Price Elasticity of Demand? A good economist is not just interested in calculating numbers. The number is a means to an end; in the case of price elasticity of demand it is used to see how sensitive the demand for a good is to a price change. The higher the price elasticity, the more sensitive consumers are to price changes. A very high price elasticity suggests that when the price of a good goes up, consumers will buy a great deal less of it and when the price of that good goes down, consumers will buy a great deal more. A very low price elasticity implies just the opposite, that changes in price have little influence on demand. Often an assignment or a test will ask you a follow-up question such as Is the good price elastic or inelastic between $9 and $10. To answer that question, you use the following rule of thumb: If PEoD 1 then Demand is Price Elastic (Demand is sensitive to price changes)If PEoD 1 then Demand is Unit ElasticIf PEoD 1 then Demand is Price Inelastic (Demand is not sensitive to price changes) Recall that we always ignore the negative sign when analyzing price elasticity, so PEoD is always positive. In the case of our good, we calculated the price elasticity of demand to be 2.4005, so our good is price elastic and thus demand is very sensitive to price changes. Data Price Quantity Demanded Quantity Supplied $7 200 50 $8 180 90 $9 150 150 $10 110 210 $11 60 250

Racism Is An Unequivocal Problem Throughout Australian...

â€Å"You can t delete racism. It s like a cigarette. You can t stop smoking if you don t want to, and you can t stop racism if people don t want to. But I ll do everything I can to help.† According to UWS, one in five people living in Australia have experienced racist abuse. Nearly half of all Australian residents from a culturally and linguistically diverse background have experienced racism at some time in their life. According to FYA, approximately seven in ten teenagers have experienced racism throughout their life. The question still remains: does the preservation of culture, community and the environment depends on us? Absolutely. The culture of Australia in my opinion is the main aspect of this entire statement. I believe this is evident throughout the strong messages Randa Abdel Fattah states in her speech and, the everlasting words from the powerful speech Wei-Li and Me. To begin with, racism is an unequivocal problem throughout Australian society. The essence of racism is one ethnic community believing they have superiority over another community or culture, and some of it is just ignorance. With Australia today being a multiethnic society, racism has been a part of our community for a very long time. For years and years, the depiction of the whites being superior over the Indigenous has happened all throughout Australia. Racial abuse in Australia has been recently streamed worldwide by passengers on public transport, videoing white Australians verballyShow MoreRelatedEssay about Medical Marijuana4281 Words   |  18 Pagesmarijuana became widely accepted by western medical practitioners. It wasn?t until the mid 1800s that the United States embraced its therapeutic qualities as evidenced by the 1860 convening of the Committee on Cannabis Indica of the Ohio State Medical Society, which reported on its therapeutic applications. In the years from 1840-1890, the medical community in the U.S. had written 100 papers recommending its use for various illnesses. By the early 20th century nearly 200 papers had been written demonstrating

Settling the Issue on Christ’s Presence in the Sacrament of the Eucharist Free Essays

string(23) " and daughters of God\." Questioning the Presence of Jesus Christ in the Sacrament of the Holy Eucharist Jesus Christ shared the Last Supper with his disciples on the night before He was crucified. It was during this event that He introduced the sacrament of His blood and body. He instituted the sacrament to bring about the suffering on the cross through the generations and to let the church take over his Spouse attribute to his resurrection and death. We will write a custom essay sample on Settling the Issue on Christ’s Presence in the Sacrament of the Eucharist or any similar topic only for you Order Now As goes the Gospel of Matthew: â€Å"While they were eating, Jesus took bread, said the blessing, broke it, and giving it to his disciples said, Take and eat; this is my body. Then he took a cup, gave thanks, and gave it to them, saying, Drink from it, all of you, for this is my blood of the covenant, which will be shed on behalf of many for the forgiveness of sins† (Matthew 26:26-28; Mark 14:22-24, Luke 22:17-20, 1 Corinthians 11:23-25) (Fay 8). Coming from Jesus Christ the Catholic Church says that as the Eucharist is celebrated, the body and blood of Jesus will be symbolize with the bread and wine through the power of the Holy Spirit. The priest serves as the instrument in this celebration. Through out the Eucharist, a priest utters the words Jesus said during His Last Supper and it says: â€Å"I am the living bread that came down from heaven; whoever eats this bread will live forever; and the bread that I will give is my flesh for the life of the world†¦ For my flesh is true food, and my blood is true drink† (John 6:51-55) (Fay 8). Jesus Christ is present including all his divinity, soul, blood and body represented by the wine and bread during the Eucharist. Jesus Christ has truly been resurrected after dying for the sins of humanity. When church members talk about the real presence of Jesus Christ in the sacrament of the Eucharist, they talk about the other types of his presence like the wine and bread. His body and blood are the most important symbols of his presence during the sacrament of the Eucharist (Fay 8). Body: Bringing Back the Meaning of the Eucharist The first question then is how the bread and wine represent Jesus Christ’s presence. A lot of people may question how this happens. The truth of the matter is the church will never be able to fully explain the mystery behind the rising of the Christ during the sacrament of the Eucharist. Until now, it still remains to be an inexhaustible puzzle that overwhelms the Catholic Church. It must be remembered that the Creator taking place at the identity of God can do so many things that the imagination of humans cannot even reach or comprehend. God made the world for Him to be able to share His life to those who are not God (Fay 7). He created the world for the human beings. This act alone is a manifestation of His plan of salvation. It can be clearly seen that with this kind of plan, the kind of wisdom used was that kind that does not reach any human beings understanding. It is beyond the comprehension of the human mind. Despite all that, God did not leave His people in ignorance. Whatever His plans are He always shared it with his people. He revealed His majestic plans to the humanity by giving us the ability to understand the gift of faith. He also provided us with the grace of the Holy Spirit. With this, we are now able to understand God’s actions and God’s plans, all of which any human being would never understand in his whole lifetime. Because of the grace of the Holy Spirit and the gift of faith humans can now understand God’s mystery (Fay 9). Today, the bishops of the Catholic Church serve as Jesus Christ’s apostles. The bishops provide the people with knowledge about Jesus Christ and God. In short, they function as the teachers of the church. Bishops have a better understanding of God’s mystery than any other human being on earth. Bishops comprehend the mystery better than anyone who has a better job, higher salary, higher intelligence quotient and even those who have higher understanding of the different languages in the world. It is only the bishop who can reveal to the people whatever God has revealed. A bishop also encourages all church goers to make understanding of the mystery of God deeper than it already is. He also promotes a better understanding of the gift of the sacrament of the Eucharist (Fay 13). The question then is how else is the presence of God exists in the sacrament of the Eucharist. Not all people understand the mystery of God and especially not everyone is even willing to understand to begin with. The first question would be why, of all symbols, did it have to be food and drink that represent Jesus in the sacrament of the Eucharist? The bread, for example, is not just a representation of the food Jesus and the disciples ate during the Last Supper. The food serves as spiritual nourishment simply because of the love of Jesus for humanity. It has been said earlier that God has plan for our salvation and with this plan, He is asking us to participate in the life of the Trinity. Because of the food shared during the sacrament of the Eucharist, the people are brought back to the sacrament of Baptism. The sharing of the bread means the sharing of life which starts with a person’s baptism. During the baptism, a human being is joined to Jesus Christ, which, of course, is possible only with the power of the Holy Spirit. Here is where the communion of the Father, of the Son and of the Holy Spirit come in (Pannenberg 293). Because of Baptism, the humans become the adopted sons and daughters of God. You read "Settling the Issue on Christ’s Presence in the Sacrament of the Eucharist" in category "Papers" This is strengthened through the sacrament of Confirmation. It is increased and nourished through the participation of the human being in the sacrament of the Eucharist. As a person drinks the blood of Christ and eats the Body, Jesus remains in the lives and spirits of the people who took him. This way, the humans are united to Christ and of course to His divinity. Humans are known as with corrupt natures. They are mortal. But because of the sacrament of the Eucharist, the humans are joined to Christ and both share the same source of life (Pannenberg 293). According to John 6:57, â€Å"Just as the living Father sent me and I have life because of the Father, so also the one who feeds on me will have life because of me. † As we are united to Jesus Christ and with the help of the Holy Spirit in us, a relationship is been among the Father, the Son, the Holy Spirit and the humans. This relationship is strengthened through Baptism and is deepened with the sacrament of Confirmation. Because of these sacraments, humans are able to share their life with the Holy Trinity. Through the Eucharist, humans give thanks and praise to the glory of God (Pannenberg 293). Another issue that needs to be addressed is that people are not aware of what the Eucharist is all about. Not all people know that aside from being just a meal, the Eucharist is also a sacred form of sacrifice. The truth is, our sins are the kind of sins that make it impossible for us to share God’s life. Despite all of it, God has shown His love for us by sending His son Jesus Christ to earth to die for our sins. Jesus Christ died and was resurrected from the dead. Because He is an almighty one, He was able to conquer these events and was even able to unite humans to God (Johnson and Penner 305). What the church does now is to gather everyone and commemorate what Jesus Christ has done for us. The Eucharist serves as an instrument to unite everyone in oreder for them to receive the benefits of God (Johnson and Penner 305). According to the book of Hebrews, Jesus Christ, was a priest spent his life creating intercessions for humans before God. Because of this, he is nowhere near the high priests who offered sacrifices in the temples of Jerusalem (Johnson and Penner 305). The powers of high priests are surpassed by Jesus Christ’s actions because the sacrifice he offered is perfect. The sacrifice he offered was himself (Johnson and Penner 305). In the Eucharist, the eternal sacrifices of Jesus Christ are always represented but the people are not just there for speculation. The church goers are not just spectators. They are different levels of activeness in the Eucharistic sacrifice among the worshipping community and the priest (Johnson and Penner 305). Before the priest stands before the worshipping community, he first has to be ordained. After ordination, he then represents Christ as the head of the Catholic Church. Everyone in the Catholic Church is baptized as a member of the Body of Christ. The Eucharist as a sacrament serves as a sacrifice of the church (Johnson and Penner 307). In the Eucharist, whatever sacrifice Jesus Christ has given is also the sacrifice that the members of His body offer. The sacrifice unites everyone. This sacrifice, during the sacrament of Eucharist, becomes sacramentally present. This way, the humans sacrifice themselves to God (Johnson and Penner 307). Then again, after this, people still question the existence of bread and wine in the Holy Eucharist. Another question people ask is why, after considering bread and wine as Christ’s body and blood, still taste like bread and wine? People are expecting the bread and win during the sacrament of the Eucharist to taste like body and blood of Christ and not just another bread and wine (Johnson and Penner 308). While celebrating the Eucharist, Jesus Christ’s presence comes in the form of bread and wine. The bread and wine are simply both appropriate for the Sacrament of the Holy Eucharist. Looking back at the traditional language of theology, especially in the consecration act, the bread’s and wine’s substance is transformed by the Holy Spirit into Jesus’ Christ’s body and blood (Johnson and Penner 308). What changes then, is not the physical appearance and the physical taste of the bread and wine, but the â€Å"substance† and the â€Å"meaning† of each instrument. It is then natural that the physical attributes of the bread and wine remain the same (Johnson and Penner 309). Here is where the question of faith comes in. St. Thomas Aquinas coined the terms â€Å"substance† and â€Å"accidents† to study faith. He used the terms to address what appears to be wine and bread (â€Å"accidents,† being the physical attribute of a matter) appears to be Jesus Christ’s blood and body (now being at its â€Å"substance† state, which represents the deepest possible reality) (Johnson and Penner 313). There is indeed a change at the substance level, the bread being Christ’s body, and Christ’s blood coming from wine. Without this transubstantiation, no one would be able to even talk about and think of the presence of Jesus Christ in the sacrament of the Holy Eucharist (Johnson and Penner 313). The mystery of faith is indeed something that humans consider too great for their comprehension, which is why studies and researches are here to better equip the people with enough understanding of this concept (Johnson and Penner 313). The mystery of this faith can only be acquired by reading it from the Bible and the Catholic Church because these medium is where God comes for us to remember. Changes come every now and then, and sometimes, the characteristics of these â€Å"accidents† change. In some occasions, even when the substance is already different, the accident still looks exactly the same (Johnson and Penner 315). A good example would be having a child reach the stage of adulthood. When he reaches this stage, it is natural that his characteristics change. He grows taller, he develops an adam’s apple, he grows muscles and his voice becomes deeper and bigger. Then again, the fact remains that he is still the same old baby who his mother once delivered (Johnson and Penner 315). Another example would be a grape fruit which a person eats. When he eats the grape fruit, the fruit soon becomes digested and becomes part of the person’s body in form of nutrients, vitamins and minerals. The person who ate the grape fruit remains as the same person who ate the fruit even before the act. The fruit, on the other hand, has characteristics that are no longer the same. The grape fruit is no longer a grape fruit, but a part of the person’s body (Johnson and Penner 315). The same is true with the presence of Christ in the Sacrament of the Holy Eucharist. Even if the wine and the bread in the Holy Eucharist are in the blood and body of Christ’s substances, these no longer have the characteristics of a person, but only the wine and the bread (Johnson and Penner 315). This is where the question about the limitation of bread and wine comes in. People ask if the bread used during the Holy Eucharist stops being a bread, and if the wine does not remain to be wine for how long. Yes, the bread does not stay as bread forever, and the wine does the same. Jesus Christ can be present, all of His divinity, soul, blood and body, although the wine and the bread can no longer stay. The wine and the bread has to be given away because if not, there would be no transformation between the bread and the body, or the wine and the blood. The wine and the bread have to be given away in order for them to become Body and Blood (Johnson and Penner 315). Not all people still believe everything they hear and say about the Eucharist. They still question the use of bread and wine. It is really appropriate? Why, of all foods and drinks, does it have to be a bread and a wine? The presence of Jesus Christ and Lord God Almighty are indeed appropriate for being represented by bread and wine since Jesus Christ gave himself to humanity and to the world as a whole in a manner that engages the symbolism existing in drinking wine and eating bread (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 66). Aside from that, Jesus Christ offered himself to us in such a way that humans are kept alive, because humans sustain their means survival through drinking and eating, or through wine and bread. The use of wine and bread also tests the faith of a person because the presence of Jesus Christ’s body and blood can never be discerned whichever way a human tries except for having faith (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 66). St. Bonaventure once said that it is no difficult at all to say that Christ exists in the Holy Eucharist in manner of symbols, breads and wines. The more difficult concept to understand is the whether or not Christ actually exists in the sacrament as He exists up in the heavens (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 67). With faith, humans believe that yes, Christ in indeed present in the sacrament as well as in heaven. However, given that the use of bread and wine is appropriate, it still is not clear for many because not all people who consume the bread and the wine actually believe in the Sacrament of the Holy Eucharist. They may attend the Sunday mass on a regular basis, but it does not necessarily mean that they actually worship the Lord, or even understand the ceremony to begin with (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 67). If â€Å"receiving† is defined as â€Å"consuming,† then naturally, anyone who receives eats the bread and drinks the wine, eats and drinks the body and blood of Jesus Christ. If, on the other hand, receiving is defined as accepting willingly of the body and blood of Jesus, then, someone without faith does not â€Å"receive† the body and blood of Jesus. A person â€Å"receives† the body and blood of Jesus if he is willing to accept the spiritual benefits of the act (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 68). He should also be aware of why he is eating the bread and drinking the wine. He should not be someone who went to the Church just to attend some mass. He should be there to worship the Lord, respect the rituals, listen to the Word of God and then receive Him through Jesus Christ’s blood and body (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 68). If a person consumes the wine and bread without faith, he cannot change the fact that he is consuming the blood and body of Jesus Christ. However, the different between having faith and having none is receiving the spiritual benefit that goes together with having faith. The spiritual benefit obtained from receiving Christ’s body and blood with faith is the communion with Christ. Faith can be practiced by simply following the grace of God. The human’s love for God must be increased (Libreria Editrice Vaticana, Catholic Church USCCB Publishing, USCCB Publishing and Catholic Church 68). People question the symbolism of wine and bread. Are these foods just symbols that represent the body and blood of Jesus Christ? Symbol is used casually as something that represents another thing. The bread and wine used in the Sacrament of the Holy Eucharist are not merely symbols, because they do not represent the body and blood of Jesus Christ. They are the body and blood of Jesus Christ. According to St. John Damascene, having the bread and the wine foreshadow Jesus Christ is not underestimation. â€Å"The bread and the wine are actually Jesus Christ, because according to the Orthodox Faith, Jesus said, ‘This is my body’. He did not say, This bread is my body. Therefore, the bread and wine during the Sacrament of the Holy Eucharist are not symbols, but the real, actual self of the Lord† (O’Gorman, O’Gorman and Faulkner 136). It has to be understood that the body and blood of Jesus Christ arrived on Earth no longer as the Lord’s muscles and life, but as a sacramental form. Jesus Christ is not symbolized by the bread and the wine because he is under these things. His presence exists. There are countless ways on how the symbolism of wine and bread, or of drinking and eating, reveals the meaning of the Holy Eucharist. An example would be with the way food provides and energy to the human body. If the food makes the body more nutritious, then it also follows that the Eucharistc food also nourishes the spiritual being of a person. Aside from that, it is already a fact that the sharing of food inside the Church is always communal, in which all members of the Catholic Church eat from the same plate of Jesus’ Christ’s body. This way, communion is established, and this communion exists not only between the Church members but also among the Father, Son and the Holy Spirit (O’Gorman, O’Gorman and Faulkner 136). St. Paul says that a single bread, once shared by the whole community on a Eucharistic gathering, is a manifestation that the believers of the Holy Spirit are gathered to worship one Lord (O’Gorman, O’Gorman and Faulkner 136). The bread and the wine then become an instrument of union among the people of God. Conclusion Jesus Christ has long promised his people that He will always be with His people. In Matthew 28:20, he said that he will not leave us as he uttered the words â€Å"Always, until the end of the age† (Price and Weil 136). With that, it is then confirmed that Jesus Christ has a â€Å"real presence† during the Sacrament of the Holy Eucharist. According to St. Thomas Aquinas, â€Å"the relationship between Jesus Christ and the people is just like the relationship of friends who live together, in that there is an unwritten law that friends should never leave each other’s sides† (Price and Weil 136). Jesus Christ has fulfilled His promise by having with us His blood and body which people receive during the Sacrament of the Holy Eucharist. How to cite Settling the Issue on Christ’s Presence in the Sacrament of the Eucharist, Papers

The Economics of Commercial Property Markets

Question: Discuss about The Economics of Commercial Property Markets? Answer: Introduction The interest rate is one of the major monetary policy aspects, which have a significant influence on the money supply in the economy and consequently the economic activities. A high-interest rate affects the easy availability of the capital in the economy negatively, while lower interest rate increase the money supply and make the obtaining of capital sources easy for the individuals and the firms both (Houben, 2012). This report analyses the impact of lower interest rate on the British Economy over the last 7 years with the use of microeconomic and macroeconomic theories. Along with this, it also includes the expectations from the Central Bank of England to mitigate these issues. Impact of Interest Rate on British Economy The UK interest rate is quite low from last several years. In the year 2009, it was dropped to 0.50%, which is still at the same level as below: UK Interest Rate (Trading Economies, 2016) From the economic perspective, the lower interest rate has a significant influence on the economic growth due to the availability of capital and required funds to the investors and businesses in easy terms (Sloman and Jones, 2014). The low-interest rates in the last 7 years caused a decline in the cost of capital for the businesses and the individuals and contributed to increasing their income level. An increase in the income level also caused an increase in spending and consequently the demand and the production activities in the economy (Novales, et al, 2014). It is because lower interest rates made the borrowings cheaper and it caused an increase in spending and investment. From the theory of the economic growth of macroeconomics, it can be analysed that the lower interest rates were related to the economic growth objective of the economy, which dealt with the long-run growth of the income and consequently the output and employment (Lewis, 2013). It is because lower interest rate led the higher aggregate demand and consequently the production activities and the requirements for the more people to fulfil the production activities. From the theory of economic growth, it can also be explained that this lower interest rate increased the economic growth of the country by increasing the employment and production activities. It is because the lower interest rate reduced the cost of borrowings and the also encouraged the customers and firms to take a loan for their investments and the financial spending (Novales, et al, 2014). On the basis of the theory of income of macroeconomics, the lower interest rates were effective to decline in the mortgage interest payment and consequently increased the disposable income and the consumer spending for improving their living standards (Means, et al, 2015). It is because this theory depicts that there is a relationship between the income, output and expenditure as an increase in income level cau ses an increase in output and the expenditures from the firms and individuals (Sloman and Jones, 2014). But at the same time, according to the theory of prices, the lower interest rates also contributed to increasing the inflation level in the economy. It is because the theory of price exhibits that an increase in the quantity of money increases the price level in the economy at inflationary level. It is because the lower interest rate increases the income level of the people and consequently the demand for them that causes an increase in the demand from the level of supply and it creates the inflationary situation (Brigo and Mercurio, 2013). The below graph shows an initial increase in the inflation rate due to lower interest rates, but soon the government has taken various inflation control measures that caused a decline in the inflation rate, but in 2016, it rose slightly (Treanor, 2016): UK Inflation rate (Trading Economies1, 2016) This inflationary impact can be seen from the rise in the asset prices in the UK as on average there was 23% increase in housing prices during 2005-2015 in England while 19% rise in the housing prices of London (Croucher, 2016). Overall, in 2013, the housing price rise was 6.23%, while in 2014; it was 6.66% after inflation adjustment (Global Price Guide, 2015). Similarly, on the basis of the microeconomic theory of consumer behaviour, it can be determined that the lower interest rate affected the behaviour of the customers towards the saving due to decline in the overall return on their savings in the banks. In the last seven years, the household saving rates have increased to a significant level, but they are showing a downward trend now due to lower return to the people on their savings that have a significant influence on their income level (Barghini and Pasquali, 2015). The below graph shows the UK household saving rates over the last 10 years: UK Household Saving Rates (Trading Economies2, 2016) A decline in the return is the indicator of a decline in the economic welfare as it reduced the interest of the investors. Along with this, it is also affecting the level of saving from the foreign countries as the investors are finding the other countries attractive to save their money and it is causing a decline in the demand for UK currency and consequently, it depreciated the exchange rate. It also affected the import and exports of the firm as exports become more competitive while imports became more expensive (Peng, 2015). The below chart shows a decline in the trade of balance because of decline in the demand for UK currency and consequently a decline in the revenue from exports: UK Balance of Trade (Trading Economies3, 2016) From this, it can be determined that a lower interest rate in the UK has a significant influence on the import and export activities and it is causing a decline in the revenue from exports and consequently a deficit balance of payment. But at the same time, the low rates have a positive impact on the economy of Britain as it enabled the Federal Reserve to reduce the cost of mortgage-backed bonds along with reducing the cost of home ownership in the economy. The general investment model also depicts an inverse relationship between the interest rate and the investment in the new properties in an economy (Ball, et al, 2012). The increasing investment in the housing properties in the UK in the last 7 years can be determined by an impact of the lower interest rates as the investment model depicts an increase in the expectations of the people for higher outputs in the future time period and consequently increases the aggregate demand (Powell and Powell, 2015). Overall, it can be determined that the lower interest rates in the UK increased the business investment, housing investments and a decline in the housing cost, but at the same time, it slightly increased the inflation rate, deficit balance of payment, decline in saving rates of households etc that are having a negative impact on the economic growth objectives of the British economy (Canocchi, 2016). Due to this, there is a need for the Central Bank of England to take some appropriate actions and steps to reduce its negative impact and to ensure economic growth. Recommendations for Central Bank of England From the Central Bank of England, it can be expected from the current conditions that the bank should make some slight changes in its monetary policy as per the change in the economic situation. In the current, the slight rise in the inflation rate may become worse in the future time period and for this, the Central Bank is required to consider a hike in the interest rate, so that the money supply in the economy can be declined and consequently the inflationary situation. At the same time, it should also be expected that the Central Bank will change the quantitative easing strategy for the economic growth and will also focus on increasing the saving rates in the economy (Lewis, 2013). It is because lower interest rates are affecting the return from the savings and due to this, it is declining continuously and consequently affecting the social welfare. A rise in the interest rates should be expected from the Central Bank of England in order to increase the currency value and consequently will reduce the cost of exports and make the imports cheaper. It is because a higher interest rate will attract more investment in the economy and will increase the demand for the British Pound that will lead an appreciation in the value of the currency and will contribute to making the balance of payments positive (Brigo and Mercurio, 2013). Conclusion From the above discussion on the basis of different micro and macroeconomic theories, it can be explained that low-interest rates in the British economy over the last 7 years have a significant influence on the economic growth. It caused an increase in the economic growth, business investments and contributed to improving the living standards of the people in the economy. But, the British economy also faced a slight increase in the inflation rate, deficit in the balance of payment and a decline in the household saving rates, which influenced the long-term economic growth objectives of the government. So, it should be expected from the Central Bank of England that it should increase the interest rates in the current conditions so that the negative impact on the economic growth can be prevented. References Ball, M., Lizieri, C. and MacGregor, B. (2012) The Economics of Commercial Property Markets. UK: Routledge. Barghini, T. and Pasquali, V. (2015) Household Saving Rates 2015. [online]. Available at: https://www.gfmag.com/global-data/economic-data/916lqg-household-saving-rates (Accessed: 12 March 2016). Brigo, D. and Mercurio, F. (2013) Interest Rate Models Theory and Practice. UK: Springer Science Business Media. Canocchi, C. (2016) Britain on track for seven years of record low interest rates as global markets turmoil pushes back hike prospects. [Online]. Available at: https://www.thisismoney.co.uk/money/news/article-3399359/Britain-track-seven-years-record-low-rates-global-markets-turmoil-pushes-hike-prospects.html (Accessed: 14 March 2016). Croucher, S. 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