Articles about Economy Research Paper Example | Topics and Well Written Essays - 2500 words

Articles about Economy - Research Paper Example Given the inelastic nature of the supply curve, the impact of a negative demand shock had been rather hard for the market. The result of this oversupply was a depreciation in house price by 45% from what it had been in 2008. In Dubai alone, the fall in equilibrium demand price had been as much as 58%, owing to a sharp fall in the number of tourists. Falling demand for houses is also evident from depreciation in the amount of rents being paid on houses; statistics show this fall amounting to 10% in 2010 from what it had been in 2008. An even more pestering issue is that the nation had invested so much into high-end ventures, that there arises no question of turning back which is why the UAE housing market is preparing to introduce another 26,000 units by 2011 (Menon, â€Å"More sharp falls ahead for UAE house prices†). 3 The stock market of UAE, for example, is a market that follows a competitive structure. Similar to the traits of a monopolistically competitive market, the stocks are found to be somewhat different in their innate features, either due to the brand names that are associated with them or due to the different rates of return that they offer. However, while the former is an apparent factor, dependent upon the perception of the investor, the latter is a variable one. In fact, it is the returns that a stock offers which determine the popularity of the same; the moment a rumour hits the market about a possible downfall, the demand for such a stock falls simultaneously. Hence, competitive market forces are the reason why there are any absences of barriers preventing the economic units to act according to the market moves. For instance, the global financial meltdown resulted to a downward revision of the UAE stock indices as was the case for almost every other nation around the world. Such a development resulted to a reduction in the number of investors in the UAE