Budget Examples Flashcards
1
Q
Rachel reeves said ‘growth is our number one priority’- how does the budget conflict with other macro policies
A
Spending at the tune of £40b shows the government is willing to create inflation in the short run, yet also growth. Which suggests the government is prioritising growth over inflation
2
Q
How is the OECD’s December predictions going against what the target of the budget.
A
The target of the budget is growth through investment - thus targeting long run growth as well as short run since it’s capital spending
OECD:
Expects 0.9% growth in 2024, down from 1.1%
Predicts 1.7% in 2025, up from 1.2%
In 2026, they expect 1.3% growth
The OECD may not be taking into account the fact that government investment will be successful.!
