Essay Practice Flashcards
Eva if i r is lowered then AD will i
Decoupling
Eva of QE
I creates Asset bubbles if I in housing not in fop
AN of Ricardian equivalence (contractionary fiscal policy
Expectation that the gov will have to follow austerity measures in the future will cause C d and I d in advance of austerity measures
AN of crowding out (exp fiscal
i D for loanable funds
i ir for bonds
Higher cob, higher return on the I on gov bonds
Less money left for I
AN of wealth effect ( inequality
Equity withdrawal
Borrowing more against the higher value of their property
Eva of infrastructure
Oppo cost: might d spending on edu
Eva of protectionism on producers
Prod and compe (if the fall in competition makes firms complacent, leading to less incentive from firms to I in cap
Eva of protectionism on gov
Retaliation leads to fall in x
Quota does not generate gov revenue
Eva of debt
Structural v cyclical
AN of retaliation
Protectionism might protect employment in some industries yet in others retaliation might reduce X, reducing MRP and tax receipts
Eva of glob as a cause of inequality
Redistribution: Kuznet
Financial crisis
Trumps reshoring
Probs of high gov expenditure
Crowding out: financial and resource
Debt =increase payment=less expenditure
Low efficiency
eva of income tax
Laffer curve
Eva of d ue as a benefit of protectionism
Retaliation
Eva of increase in compe in developing countries
Increase wage
Trickle down
Extra income to the rick is spent on domestically produced goods and services which generates job opportunities and extra income for the less rich
Another Eva for cheaper pound encourages production/ increase inf pressures
The producers absorbs costs/maintain p rather than changing Px
Fiscal déficit eva
Structural doesn’t go away even if operating at full potential
eva envi damage incur cost so higher MSC and lower growth
Firms may invest in new machinery to reduce damage=>higher i higher E.G.
whats the diff between a price fall and er d?
Eg Brazil currency depreciates, the primary producers revenue fall
But CA bop should increase
AP what countries have trade surplus
Saudi Arabia
AP death from fuel poverty
9000 pa
AP U.K. Austerity
cut in gov spending for local authorities
Eva acess to market
Depend on compe: are they infant industries?
