Every diagram you need for A-Level Economics — micro and macro, fully labelled, across all major exam boards.
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139 diagrams
The downward-sloping demand curve showing the inverse relationship between price and quantity demanded. Illustrates the law of demand with a standard D curve.
View →Supply & DemandThe upward-sloping supply curve showing the positive relationship between price and quantity supplied. Illustrates the law of supply with a standard S curve.
View →Supply & DemandA single downward-sloping demand curve with three points: a fall in the good's own price moves from A down the curve to B (an extension of demand), and a rise moves from A up the curve to C (a contraction of demand). The curve itself does not shift.
View →Supply & DemandA single upward-sloping supply curve with three points: a rise in the good's own price moves from A up the curve to B (an extension of supply), and a fall moves from A down the curve to C (a contraction of supply). The curve itself does not shift.
View →Supply & DemandStandard supply and demand diagram showing market equilibrium where quantity demanded equals quantity supplied, determining the equilibrium price and quantity.
View →Supply & DemandDiagram showing a rightward shift of the demand curve, leading to higher equilibrium price and quantity. Used to analyse factors increasing demand such as rising incomes or changing tastes.
View →Supply & DemandDiagram showing a leftward shift of the demand curve, leading to lower equilibrium price and quantity. Used to analyse factors decreasing demand such as falling incomes or a substitute becoming cheaper.
View →Supply & DemandDiagram showing a rightward shift of the supply curve, leading to lower equilibrium price and higher quantity. Used to analyse cost reductions, technology improvements, or subsidies.
View →Supply & DemandDiagram showing a leftward shift of the supply curve, leading to higher equilibrium price and lower quantity. Used to analyse cost increases, raw material shortages, or taxes.
View →Supply & DemandShows demand and supply both shifting right. Equilibrium quantity rises, because both an increase in demand and an increase in supply raise the quantity traded. The effect on price is indeterminate: the demand shift pushes price up and the supply shift pushes it down, so the direction depends on which shift is larger.
View →Supply & DemandShows demand shifting left while supply shifts right. Equilibrium price falls, because a fall in demand and a rise in supply both push price down. The effect on quantity is indeterminate: the demand shift reduces quantity and the supply shift raises it, so the direction depends on which shift is larger. In this diagram the two effects cancel exactly, leaving quantity unchanged.
View →Supply & DemandShows how consumer surplus and producer surplus both expand when demand shifts right. The new equilibrium is at a higher price and a higher quantity, with the enlarged consumer surplus shaded above the price and the enlarged producer surplus below it.
View →Supply & DemandDiagram showing consumer surplus (area above price and below demand curve) and producer surplus (area below price and above supply curve) at market equilibrium.
View →ElasticityDemand curve with PED > 1 (elastic), showing that a given percentage price rise leads to a larger percentage fall in quantity demanded. Revenue falls when price rises.
View →ElasticityDemand curve with PED < 1 (inelastic), showing that a percentage price rise leads to a smaller percentage fall in quantity demanded. Revenue rises when price rises.
View →ElasticityDemand curve with PED = 1, where percentage change in price equals percentage change in quantity demanded. Total revenue remains unchanged when price changes.
View →ElasticityHorizontal demand curve showing perfectly elastic demand (PED = ∞). Any price rise above the market price causes quantity demanded to fall to zero.
View →ElasticityVertical demand curve showing perfectly inelastic demand (PED = 0). Quantity demanded does not change regardless of the price level.
View →ElasticityDiagram linking the price elasticity of demand to total revenue, showing how revenue changes as price changes along an elastic or inelastic demand curve.
View →ElasticitySupply curve with PES > 1 (elastic), showing that producers can increase output proportionally more than a price rise. Common in industries with spare capacity.
View →ElasticitySupply curve with PES < 1 (inelastic), showing that quantity supplied responds less than proportionally to a price rise. Common with perishable or capacity-constrained goods.
View →ElasticitySupply curve with PES = 1, passing through the origin, where the percentage change in quantity supplied exactly matches the percentage change in price.
View →ElasticityHorizontal supply curve showing perfectly elastic supply (PES = ∞). Producers supply any quantity at a given price but nothing below it.
View →ElasticityVertical supply curve showing perfectly inelastic supply (PES = 0). Quantity supplied is fixed regardless of price, as with land or limited-edition goods.
View →Costs & ProductionDiagram showing total cost, total fixed cost, and total variable cost curves in the short run, illustrating how costs change as output increases.
View →Costs & ProductionDetailed diagram of total cost, total fixed cost, and total variable cost curves showing the vertical gap (fixed costs) and the shape driven by diminishing marginal returns.
View →Costs & ProductionU-shaped LRAC curve (envelope curve) showing economies of scale, the minimum efficient scale, and diseconomies of scale in the long run.
View →Costs & ProductionFour short-run average cost curves, each one fixed scale of plant, tangent to a long-run average cost curve that falls (economies of scale) and then flattens (constant returns to scale), with average cost falling from P1 to P3 as scale grows.
View →Costs & ProductionDiagram illustrating internal and external economies of scale, showing how average costs fall as a firm or industry expands output in the long run.
View →Costs & ProductionDiagram showing the breakeven point (P = AC) and the shutdown point (P = AVC) for a competitive firm, distinguishing short-run and long-run survival conditions.
View →Market StructuresDiagram showing the profit-maximising output where marginal revenue equals marginal cost (MR = MC), with the profit rectangle between AR and AC illustrated.
View →Market StructuresDiagram comparing profit maximisation (MC = MR) with the alternative objectives of revenue maximisation (MR = 0) and sales maximisation (AR = AC), as explored in Baumol and satisficing theories of the firm.
View →Market StructuresBox-and-arrow diagram of the directions of integration around one bread manufacturer: horizontal integration with rival bread manufacturers at the same stage, backward vertical integration towards the wheat supplier and forward vertical integration towards the retailer, set against the primary, secondary and tertiary stages of the supply chain.
View →Market StructuresClassic monopoly diagram with downward-sloping AR = Demand, MR below AR, and profit-maximising output at MR = MC, showing supernormal profit and deadweight welfare loss.
View →Market StructuresDiagram showing a natural monopoly where the LRAC is still falling across the entire relevant range of demand, making a single producer the most efficient market structure.
View →Market StructuresMonopoly with AR = 100 − Q and MR = 100 − 2Q, and cubic costs giving a U-shaped MC (minimum £8 at Q = 20) and a U-shaped AC (minimum £35 at Q = 50, where MC cuts it). Unregulated, MR = MC gives Qm = 40 and Pm = 60 with supernormal profit. A price cap of Pmax ≈ £44.92, set where price equals marginal cost, makes the effective AR flat at Pmax up to Qr ≈ 55.08, so output rises and the firm still covers its average cost.
View →Market StructuresTwo-panel diagram showing industry equilibrium and individual firm behaviour in perfect competition, with the long-run adjustment process as supernormal profits attract entry.
View →Market StructuresTwo-panel diagram with the market on the left and the firm on the right, on one price scale. Industry demand and supply set the market price P₁, carried across to the firm as its horizontal demand curve D = AR = MR. The firm produces q₁ where MC = MR on the rising part of MC, and because AC at q₁ is below P₁ it makes supernormal profit, shaded as (P₁ − AC) × q₁.
View →Market StructuresTwo-panel diagram with the market on the left and the firm on the right, on one price scale. Supernormal profit attracts entry, so industry supply shifts right from S₁ to S₂ and the price falls from P₁ to P₂. The firm's horizontal demand falls from AR₁ = MR₁ to AR₂ = MR₂, which touches AC at its minimum, so each firm makes normal profit at q₂ where P = MC = AC.
View →Market StructuresTwo-panel diagram comparing a perfectly competitive firm (left) with an imperfectly competitive firm (right), on one price scale and one quantity scale and with the same MC and AC curves. Both produce q₁ where MC = MR on the rising MC, and price is read up from q₁ to the demand (AR) curve. The price taker's demand is horizontal (D = AR = MR); the imperfect competitor's AR slopes down, with MR below it. In both, price is above AC at q₁, so the firm makes supernormal profit, shaded as (AR − AC) × q₁.
View →Market StructuresTwo-panel diagram comparing normal profit for a perfectly competitive firm (left) and an imperfectly competitive firm (right), with the same MC and AC curves. The price taker's horizontal D = AR = MR touches AC at its minimum, where MC = MR. The imperfect competitor's downward-sloping AR just touches AC on its falling part, at the output where MR = MC, so output is lower and price higher. In both, AR = AC at q₁ and the firm makes normal profit.
View →Market StructuresTwo-panel diagram comparing a loss-making perfectly competitive firm (left) and imperfectly competitive firm (right), with the same MC and AC curves. Both produce q₁ where MC = MR on the rising MC, and price is read from the demand (AR) curve. AR is below AC at q₁, so the firm makes a loss, shaded as (AC − AR) × q₁; producing where MC = MR keeps that loss as small as possible.
View →Market StructuresDiagram showing a perfectly competitive firm making a short-run loss (P < AC), with the loss rectangle illustrated and the decision to stay open while P > AVC.
View →Market StructuresDiagram showing monopolistic competition in the short run (supernormal profit) and long run (normal profit), with the firm facing a downward-sloping demand curve.
View →Market StructuresSweezy's kinked demand curve model for oligopoly, explaining price rigidity: rivals match price cuts but not price rises, creating a kink and discontinuous MR curve.
View →Market StructuresThe kinked demand curve for oligopoly on its own: elastic above the kink price, inelastic below it, without the MR or MC construction.
View →Market StructuresDiagram illustrating the theory of contestable markets, where the threat of new entry disciplines incumbent firms to price competitively even in concentrated markets.
View →Market StructuresDiagram contrasting allocative efficiency (P = MC) and productive efficiency (P = min AC), showing where each is achieved and comparing market structures.
View →Market StructuresOne marginal cost curve and two U-shaped average cost curves: AC1 includes organisational slack and lies above AC2 at every output, and removing the slack lowers the whole AC curve to AC2. MC cuts each AC curve at its minimum.
View →Price DiscriminationDiagram showing block pricing (second-degree price discrimination), where consumers pay different prices for different quantities consumed, such as utility tariffs.
View →Price DiscriminationDiagram showing market segmentation into two groups with different PEDs, with the firm charging a higher price in the inelastic segment and lower in the elastic segment.
View →Government InterventionSupply and demand diagram showing the effect of a specific per-unit tax: leftward supply shift, rise in consumer price, fall in producer price, tax revenue rectangle, and deadweight loss.
View →Government InterventionSupply and demand diagram showing the effect of a percentage (ad valorem) tax, which rotates the supply curve, widening the tax wedge at higher quantities.
View →Government InterventionA specific tax of £2 per unit with real numbers: the price rises from £5.00 to £6.50 and sales fall from 1,000 to 800 units. Of the £1,600 tax revenue, consumers bear £1.50 per unit (£1,200) and producers £0.50 per unit (£400).
View →Government InterventionSupply and demand diagram showing the effect of a per-unit government subsidy: rightward supply shift, lower consumer price, higher producer price, subsidy cost rectangle.
View →Government InterventionA subsidy of £1 per unit with real numbers: the price consumers pay falls from £5.00 to £4.40 and sales rise from 1,000 to 1,100 units, while producers receive £5.40. Of the £1,100 cost to government, consumers gain £0.60 per unit (£660) and producers £0.40 per unit (£440).
View →Government InterventionDiagram showing the effect of a government-imposed maximum price set below equilibrium, creating excess demand (shortage) and reducing total welfare.
View →Government InterventionDiagram showing a binding maximum price raised from Pmax1 to Pmax2, closer to equilibrium: quantity supplied rises, quantity demanded falls and the excess demand (shortage) shrinks from Qd1 − Qs1 to Qd2 − Qs2.
View →Government InterventionDiagram showing the effect of a government-imposed minimum price set above equilibrium, creating excess supply (surplus) and reducing total welfare.
View →Government InterventionDiagram showing a buffer stock scheme where a government agency buys when prices fall below a floor and sells when prices rise above a ceiling to stabilise commodity prices.
View →International TradeSupply and demand diagram showing the effect of an import quota: domestic price rises above world price, domestic output increases, consumer surplus falls, and a quota rent is created.
View →International TradeSupply and demand diagram showing the effect of an import tariff: domestic price rises, consumer surplus falls, government gains tariff revenue, and a deadweight loss is created.
View →Government InterventionDiagram illustrating a cap-and-trade scheme for pollution, showing how the permit market sets a price for emissions and achieves a socially optimal output level.
View →Government InterventionPermit market diagram showing the government cutting the cap: the perfectly inelastic supply of permits shifts left from S1 to S2 while derived demand is unchanged, so the equilibrium permit price rises from P1 to P2 and total emissions fall to the new cap.
View →ExternalitiesDiagram showing MSC above MPC, with the free market overproducing at Qp and the socially optimal output at Qs (MSC = MPB), along with the welfare loss triangle.
View →ExternalitiesDiagram showing MSB below MPB, with the free market overconsumption at Qp and the socially optimal quantity at Qs (MSB = MSC), illustrating the welfare loss.
View →ExternalitiesDiagram showing MSC below MPC, with the free market underproducing at Qp and the socially optimal output at Qs (MSC = MPB), with a Pigouvian subsidy restoring optimality.
View →ExternalitiesDiagram showing MSB above MPB, with the free market underconsumption at Qp and the socially optimal quantity at Qs (MSB = MSC), illustrating the welfare gain from a subsidy.
View →Market FailureDiagram illustrating market failure due to asymmetric information (moral hazard and adverse selection), showing how information gaps lead to under- or over-provision of goods.
View →Market FailureDiagram showing information failure where buyers overestimate a good's benefit: perceived demand lies to the right of fully informed demand, so the market over-consumes at Q₁ above the socially optimal Q*.
View →Behavioural EconomicsDiagram illustrating behavioural economics interventions such as default options, framing, and nudges that shift consumer choices without restricting freedom.
View →Labour MarketsStandard labour market diagram with downward-sloping labour demand (MRP) and upward-sloping labour supply, determining equilibrium wage and employment.
View →Labour MarketsDiagram showing the MRP curve as the labour demand curve, derived from diminishing returns, and used to determine the profit-maximising level of employment.
View →Labour MarketsLabour market diagram showing a minimum wage set above equilibrium, creating unemployment (excess supply of labour) or reducing it in a monopsony market.
View →Labour MarketsLabour market diagram showing the National Living Wage set above equilibrium, creating unemployment (excess supply of labour) or reducing it in a monopsony market.
View →Labour MarketsDiagram showing a monopsonist employer who faces an upward-sloping labour supply and MCL above supply, paying a lower wage and employing fewer workers than the competitive outcome.
View →Labour MarketsDiagram showing a trade union pushing wages above the competitive equilibrium, creating a wage-employment trade-off with unemployment shown.
View →Labour MarketsDiagram showing bilateral monopoly in the labour market — a trade union negotiating against a monopsonist employer, with the wage and employment level indeterminate between the two extremes.
View →Labour MarketsLabour market diagram illustrating wage discrimination, showing how identical workers in different groups are paid below their MRP, creating a welfare loss.
View →Income & WealthDiagram showing the Lorenz curve measuring income inequality: the further the curve bows from the 45° line of perfect equality, the greater the inequality (Gini coefficient).
View →Income & WealthDiagram comparing Lorenz curves for two countries with different Gini coefficients, illustrating relative income inequality and its change over time.
View →AD/AS ModelKeynesian AD/AS diagram with a flat SRAS and an L-shaped (or horizontal) LRAS in the short run, illustrating how demand stimulus can raise real output when there is spare capacity.
View →AD/AS ModelClassical AD/AS diagram with a vertical LRAS at the natural rate of output, showing that demand shocks only affect the price level in the long run.
View →AD/AS ModelKeynesian AD/AS diagram showing a rightward AD shift below full employment, increasing real GDP with little or no rise in the price level.
View →AD/AS ModelKeynesian AD/AS diagram showing a rightward AD shift on the vertical section of LRAS, where real GDP stays at full capacity and only the price level rises.
View →AD/AS ModelKeynesian AD/AS diagram showing AD shifting left from the upward-curving section of LRAS onto the horizontal section: real GDP falls sharply, the price level falls slightly and a negative output gap opens up.
View →AD/AS ModelClassical AD/AS diagram showing a rightward AD shift at full employment, causing only a rise in the price level with no permanent increase in real output.
View →AD/AS ModelAD/AS diagram showing a leftward AD shift causing a fall in real GDP and a negative output gap, illustrating recession and demand-deficient unemployment.
View →AD/AS ModelAD/AS diagram with one upward-sloping SRAS: AD₁ shifts right to AD₂ (a parallel shift), so the price level rises from PL₁ to PL₂ and real output rises from Y₁ to Y₂, and unemployment tends to fall.
View →AD/AS ModelAD/AS diagram showing a rightward SRAS shift due to falling input costs or technology improvement, reducing inflation and raising real output simultaneously.
View →AD/AS ModelAD/AS diagram showing a leftward SRAS shift due to rising input costs or supply disruption, causing stagflation — higher price level and lower real output.
View →AD/AS ModelAD/AS diagram showing a rightward shift of the LRAS representing an increase in the productive capacity of the economy (long-run supply-side growth).
View →AD/AS ModelA single upward-sloping short-run aggregate supply curve with two points: at a higher price level (PL2) firms supply a higher level of real output (Y2) than at PL1. A change in the price level is a movement along the curve.
View →AD/AS ModelThe classical long-run aggregate supply curve: a vertical line at full-capacity output (Y_FE). Two price levels, PL1 and PL2, give the same output, because long-run output is set by productive capacity, not by the price level.
View →AD/AS ModelKeynesian AD/AS diagram showing the Keynesian AS curve shifting right due to an increase in productive potential, raising real output and lowering the price level where AD cuts the sloped section.
View →AD/AS ModelKeynesian AD/AS diagram showing the Keynesian AS curve shifting left due to a decrease in productive potential, raising the price level and reducing real output where AD cuts the sloped section.
View →AD/AS ModelDiagram showing how supply-side policies (education, deregulation, tax reform, infrastructure) shift the LRAS rightward, raising the economy's potential output.
View →AD/AS ModelAD/AS diagram illustrating a negative output gap where actual GDP is below potential GDP, associated with demand-deficient unemployment and deflationary pressure.
View →AD/AS ModelAD/AS diagram illustrating a positive output gap where actual GDP exceeds potential GDP, associated with demand-pull inflation and overheating.
View →Inflation & UnemploymentAD/AS diagram showing demand-pull inflation where excess aggregate demand pulls the price level upward, typically associated with a positive output gap.
View →Inflation & UnemploymentAD/AS diagram showing cost-push inflation where a rise in production costs (wages, energy) shifts SRAS left, raising prices and reducing output simultaneously.
View →Inflation & UnemploymentPhillips Curve diagram showing an upward shift of the SRPC due to higher inflation expectations, illustrating the expectations-augmented Phillips Curve adjustment process.
View →Inflation & UnemploymentLabour market diagram showing demand-deficient unemployment caused by a fall in aggregate demand, illustrated as a leftward shift in the labour demand curve.
View →Inflation & UnemploymentDiagram illustrating different types of unemployment (frictional, structural, demand-deficient, seasonal) and their relationship to the NAIRU and LRAS position.
View →Inflation & UnemploymentShort-run Phillips Curve showing the inverse trade-off between inflation and unemployment — lower unemployment is associated with higher inflation in the short run.
View →Inflation & UnemploymentVertical long-run Phillips Curve at the natural rate of unemployment (NAIRU), showing that there is no long-run trade-off between inflation and unemployment.
View →Fiscal PolicyAD/AS diagram showing the effect of an increase in government spending or a tax cut, shifting AD right and raising real GDP (and potentially the price level).
View →Fiscal PolicyAD/AS diagram showing the effect of a cut in government spending or a tax rise, shifting AD left to reduce inflationary pressure at the cost of lower real output.
View →Fiscal PolicyDiagram illustrating how automatic stabilisers (progressive tax and welfare spending) reduce the size of the fiscal multiplier and dampen cyclical fluctuations in GDP.
View →Fiscal PolicyAD/AS diagram illustrating the Keynesian multiplier: an initial injection shifts AD from AD1 to AD2, and induced rounds of consumption shift it further to AD3, so the final change in AD is k times the injection.
View →Fiscal PolicyDiagram showing how increased government borrowing raises interest rates, reducing private investment and partially offsetting the fiscal stimulus (crowding out effect).
View →Fiscal PolicyThe Laffer Curve showing the relationship between tax rate and tax revenue, illustrating that beyond a peak rate, higher taxes reduce revenue by discouraging economic activity.
View →Fiscal PolicySchematic of the average tax rate against income for three taxes: a progressive tax whose average rate rises with income, a proportional tax with the same average rate at every income, and a regressive tax whose average rate falls as income rises.
View →Fiscal PolicyDiagram showing the accelerator principle: investment responds more than proportionally to changes in national income, amplifying cyclical fluctuations.
View →Monetary PolicyFlow diagram showing how a change in the central bank base rate transmits through the economy: affecting market rates, asset prices, exchange rates, and ultimately output and inflation.
View →Monetary PolicyDiagram showing the money market with money supply (vertical) and money demand (downward-sloping), determining the equilibrium interest rate.
View →Monetary PolicyMoney market diagram showing a rightward shift in money supply, reducing the interest rate and stimulating borrowing and investment.
View →Monetary PolicyDiagram explaining quantitative easing: the central bank purchases government bonds, increasing the money supply, pushing down long-term interest rates, and boosting asset prices.
View →Monetary PolicyMoney market diagram showing the liquidity trap: when interest rates approach zero, increases in money supply fail to lower rates further, making conventional monetary policy ineffective.
View →National IncomeTwo-sector circular flow model showing the flow of income and expenditure between households and firms through goods markets and factor markets.
View →National IncomeCircular flow of income built on the two-sector core (inner real loop, outer money loop), with withdrawals (saving, taxation, imports) leaving the money flow and injections (investment, government spending, exports) entering it, paired through the financial sector, the government and the rest of the world.
View →National IncomeDiagram of the economic business cycle showing boom, recession, trough, and recovery phases relative to trend GDP growth, along with output gap fluctuations.
View →National IncomeDiagram of hysteresis: a deep recession permanently lowers the level of trend GDP, so the economy then grows at the same trend rate along a lower path and some output is lost for good.
View →Exchange RatesSupply and demand for currency diagram showing how the exchange rate is determined in a free-floating regime by the interaction of demand and supply of the currency.
View →Exchange RatesForeign exchange diagram showing an increase in demand for currency (or decrease in supply) leading to currency appreciation and its effects on exports, imports, and the current account.
View →Exchange RatesForeign exchange diagram showing a fall in demand for currency (or increase in supply) leading to depreciation, improving competitiveness but risking import-cost inflation.
View →Exchange RatesDiagram showing a fixed exchange rate regime with a managed band, illustrating how the central bank intervenes to maintain the rate within the target range.
View →Exchange RatesTime-series diagram showing the J-curve effect: after a currency depreciation the current account initially worsens before improving, as trade volumes adjust with a lag.
View →Exchange RatesDiagram showing the structure of the balance of payments: current account (trade in goods and services, income, transfers) and capital/financial account and their interrelationship.
View →Production PossibilitiesConcave PPF showing the maximum combinations of two goods an economy can produce with given resources, illustrating opportunity cost, productive efficiency, and scarcity.
View →Production PossibilitiesPPF diagram showing an outward shift representing economic growth (increase in productive capacity) through capital accumulation, technology, or labour force expansion.
View →Production PossibilitiesPPF diagram showing an inward shift representing a decrease in productive capacity, e.g. through war, natural disaster, or loss of resources, making previously attainable combinations unreachable.
View →Production PossibilitiesConcave PPF for cars and wheat showing the opportunity cost of a move along the frontier: going from 100 to 120 cars cuts wheat from 300 to 270 tonnes, so each extra car costs 30 / 20 = 1.5 tonnes of wheat.
View →Production PossibilitiesA single concave PPF with point A inside the frontier (spare capacity, unemployed resources) and point B on the frontier to the north-east of A. The move from A to B is actual growth: real output rises by using unemployed resources, with no shift in the frontier.
View →International TradePPF-based diagram illustrating comparative advantage: countries gain from specialisation and trade even if one country has an absolute advantage in producing all goods.
View →International TradeConcept map of four forces that change the pattern of trade: shifting comparative advantage, the entry of emerging economies such as China and India, trading blocs and agreements such as the UK joining the EEC and leaving the EU, and exchange rate changes such as the fall in sterling after the 2016 referendum.
View →International TradeRanked comparison of the UK's top five import sources in 1960 (USA, Canada, Australia, New Zealand, Germany) and 2023 (USA, Germany, Netherlands, France, China), grouped as Commonwealth, Europe, USA and Asia. Ranks only, because 1960 covers goods and 2023 covers goods and services.
View →International TradeA parent company in Country H (corporate tax 25%) buys a component from its own subsidiary in Country L (corporate tax 10%) at an inflated internal price. Shifting £80m of a £100m profit to L cuts the total tax paid from £25m to £13m, saving £12m.
View →Economic GrowthCircular flow diagram showing the Harrod-Domar virtuous cycle of growth: increased savings fund increased investment, which improves the capital stock and raises GDP, feeding back into further savings.
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