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Why is it easier for firms with backward integration to price discriminate?

Relevant Topics

This question pertains to topics in Macroeconomics, such as Economic Cycle, Unemployment, Government Spending, and Education


Economic Cycle: The economic cycle, also known as the business cycle, is the natural fluctuation of the economy between periods of expansion (growth) and contraction (recession).
Government Investment in Education:
This refers to public expenditure on education, which includes expenditure on schools, universities, and vocational training programs, aimed at enhancing the skillset of the population.

Detailed Explanation:

Government investment in education to promote employment in high unemployment sectors is not an example of the economic cycle but rather a fiscal policy measure. It is a strategic move by the government to tackle unemployment and promote economic growth, which could indirectly impact the economic cycle.

The economic cycle is characterised by periods of boom (high output and employment) and bust (recession or depression). While government policies, including investment in education, can influence these cycles, they are not in themselves examples of the cycle.Government spending on education is intended to enhance the skills and capabilities of the workforce, making them more employable, particularly in sectors with high unemployment rates. Over time, this can stimulate economic growth and potentially lead to an upswing in the economic cycle.


United Kingdom: In 2020, as a response to high unemployment rates due to the COVID-19 pandemic, the UK government announced a £2.5 billion ($3.3 billion) package to offer vocational training and apprenticeships for young people.

The German government has a dual vocational training system that combines theoretical education with practical experience to prepare individuals for employment in various sectors. This system has been credited with maintaining low youth unemployment rates in Germany.


In summary, not an example of the economic cycle. Such investments aim to boost employability and stimulate economic growth, which could indirectly influence the phases of the economic cycle.

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