Macro: Evaluation & Application Flashcards
What is the productivity gap of the UK compared to G7 countries?
The UK has 16% lower productivity compared to G7 countries.
What is a major cause of the UK’s low productivity?
Low R&D investment at 2.9% of GDP, compared to 3.1% in Germany and 3.2% in Japan.
What management issue affects UK productivity?
The UK has a higher proportion of low-skilled managers.
What is the impact of low-skilled managers in the UK?
It leads to less innovation and poor decision-making due to short-termism.
What is the UK’s global rank in infrastructure investment?
The UK ranks 36th globally.
What is the UK’s capital investment as a percentage of GDP?
Capital investment in the UK is 18% of GDP, which is low compared to EU counterparts.
Which sectors are affected by skill shortages in the UK?
Engineering and digital technology sectors are affected.
What is the impact of skill shortages on productivity?
Skill shortages limit productivity in high-value industries.
What is the Apprenticeship Levy in the UK?
Firms with payrolls over £3 million must invest 1% in apprenticeships.
What does the Skilled Worker Visa Programme (2022) address?
It addresses skill shortages.
What is the Full-Expensing Investment Scheme (2023-2026)?
It allows for a 100% tax deduction on new capital investments.
What are the R&D subsidies allocated for?
£360 million for pharmaceuticals, zero-carbon aircraft, and automotive tech.
What is the purpose of the Tax-Free Childcare scheme?
It encourages women to return to work.
What is the Kickstart Scheme?
A £2 billion initiative for 200,000 young people at risk of long-term unemployment.
How is the Apprenticeship Levy often misused?
It is often used for manager training rather than for new workers.
What is a negative output gap?
It occurs when actual GDP is less than potential GDP.
Which regions experience negative output gaps?
Regions include Ukraine, Latin America, Southeast Asia, and West-Central Africa.
What is a positive output gap?
It occurs when actual GDP is greater than potential GDP, indicating an overheating economy.
Which regions experience positive output gaps?
Regions include Southern Europe and Liberia.
What is an example of negative interest rates?
Japan has a negative interest rate of -0.1%.
What is the impact of negative interest rates on savers?
Savers lose real value of their savings.
What is the real interest rate?
The real rate adjusts for inflation.
What is microfinance?
Provision of financial services to the ‘unbankable’.
What is an example of microfinance in Bangladesh?
Grameen Bank.
How many beneficiaries does microfinance have globally?
200 million beneficiaries globally.
What are the products offered by Novo Nordisk?
Ozempic and Wegovy are weight loss drugs.
What is the cost range for Ozempic and Wegovy?
The cost ranges from £11,000 to £16,000 per year.
What is the market potential for Novo Nordisk in the US?
13% of a potential market of 300 million customers.
What was the impact of Novo Nordisk on Denmark?
It saved Denmark from recession, created 21,000 jobs, and contributed 1% of tax revenue.
What is a credit crunch?
A sudden reduction in credit availability.
What is an example of a credit crunch?
The Global Financial Crisis of 2008.
What was the cumulative value of UK Quantitative Easing (QE) in 2020?
The cumulative value was £895 billion.
What was the impact of UK QE on bond yields?
It pushed down bond yields, lowering mortgage rates.
What is South Korea’s economic base characterized by?
A highly diversified industrial base.
What was South Korea’s GDP growth in 2023?
0.6% in Q4 and 2.2% annually.
What characterized Japan’s Lost Decade?
Persistent stagnation from 1990 to 2011.
What caused Japan’s economic stagnation in the 1990s?
A debt crisis and stock market crash.
What are examples of micro supply-side policies?
Deregulation, privatization, work visas, and tax-free childcare.
What are examples of macro supply-side policies?
Income/corporate tax changes, migration policies, trade agreements, and infrastructure projects.
What was the estimated UK spending during COVID?
Estimated at £310-£410 billion.
What was the impact of UK COVID spending?
It stimulated aggregate demand through transfer payments and furlough.
What is the EU-UK Trade and Cooperation Agreement?
A free trade agreement post-Brexit.
What was the UK’s trade deficit in 2023?
£31.6 billion.
What tariffs were resolved in 2023 between the US and UK?
Tariffs on aerospace products.
What is the impact of the RCEP trade agreement?
It eliminates 90% of tariffs among member countries.
What is the value of Norway’s sovereign wealth fund?
$1.6 trillion.
What is the goal of Norway’s sovereign wealth fund?
Sustainability for future generations.
What was the LIBOR scandal?
A scandal where banks manipulated benchmark rates in 2012.
What is an example of stress testing in UK banks?
A scenario where the bank rate rises to 6% and UK GDP falls by 5%.
What are some nudges used in Norway for electric vehicles?
70% off toll roads and free parking for EVs.
What was the food bank usage in the UK in 2023?
3 million people.
What is the CEO pay ratio in the UK?
CEOs earn 118 times more than average workers.
