macro policy flash cards

Question 1

how much are banks forced to hold in bail in debt?

Answer 1

£4 billion

Question 2

during her time in office, by how much did thatcher decrease income tax?

Answer 2

• from 83% to 40% (across multiple cuts)

Question 3

what is the current interest rate?

Answer 3

• increst rate began to be increased in 2021
• started at 0.1%
• reached its peak at 5.25%

Question 4

how did interest rates change after the financial crash?

Answer 4

• continous cuts from 5.75% to 0.25%

Question 5

in 2010-2011 how did govt spending change in the UK?

Answer 5

cameron cut spending by £14.3 billion

Question 6

how much has been spent on QE? By how much was it expanded during covid?

Answer 6

• BOE created £895 billion
• expanded by 450bn

Question 7

what was the budget deficit during covid?

Answer 7

15% of GDP

Question 8

how did the value of the pound change after truss mini budget? why did this happen?

Answer 8

for the first time it fell below $1.09

lenders to the government feared collapse, so they began to rapidly sell government bonds, bond interest rates rose rapidly

Question 9

by how much did lizz truss cut taxes?

Answer 9

• £45 billion in unfunded tax cuts

Question 10

How many jobs did HS2 create?

Answer 10

over 30000

Question 11

what is current uk government debt? what was it in 2006?

Answer 11

just under 100% of GDP
- in 2006 it was aroung 40% of GDP

Question 12

How much did the government spend bailing out RBS?

Answer 12

$45 billion

Question 13

what was the increase in mortage repayments experienced by the average home owner?

Answer 13

• average home owner was expected to see a 61% increase in mortadge repayments

Question 14

what was the US’s fiscal policy response to the great depression?

Answer 14

• huge fiscal stimulus package
• spent on public infrastructure and employing people in conservation and construction
• Smoot- Hawley tariff act 1930- protectionist policies

Question 15

what was the UK’s fiscal policy response to the great depression?

Answer 15

1931 emergency budget
-cut public sector wages and unemployment benifits by 10%
- increased income tax by 2.5%
- 10 % tariffs on all imports

Question 16

what was the US monetary policy response to the great depression?

Answer 16

• cut interest rates from 6% to 4%, then raised them again to prevent the fall of the value of the dolalr
• increased the money supply

Question 17

what was the UK’s monetary policy response to the great depression?

Answer 17

• abandoned the gold standard and the value of the £ fell by 25%
• interest rates were reduced from 6% to 2%

Question 18

what was the US’s fiscal policy response to the financial crash?

Answer 18

• 2008 economic stimulus act, $152 bn
• 2009 american recovery and reinvestment act, $787 bn over a period of years

Question 19

How much was spent on debt servicing in 2022/2023 by the uk government?

Answer 19

£112 bn

Question 20

what was the US’s monetary policy response to the financial crash?

Answer 20

• cut interest rates several times from 5.25% to 0-0.25%
• 3 rounds of QE
• lead to an increase in the assets held by the FED from $1 tn to $4tn

Question 21

what was the UK’s monetary policy response to the financial crash?

Answer 21

• cut interest rates over time from 5.75% to 0.5%
• QE totalling £400bn

Question 22

what policy has the government introduced to encorage parents back into work?

Answer 22

• 30 hours free child care for 3-4 year olds
• 15 hours free health care for 2 year olds

Question 23

when did planning on hs2 start and when was it expected to be implemented?

Answer 23

• planning started in 2017
• it was expected to be completed between 2029 and 2033

Question 24

what was the predicted cost of hs2?

Answer 24

• expected to cost between 59 and 67 million pounds (due to price rises)
• it was originally expected to cost 37 million

Question 25

what does the OECD estimate to be the benifit of one additional year of education?

Answer 25

boosts long term growth (productivity) by 3-6%

Question 26

what is irelands coorperation tax? what firms are set up there?

Answer 26

• 12.5% one of the lowest in europe
• apple headquaters in ireland

Question 27

what is the impact of the government freezing the tax rates until 2029?

Answer 27

• 3 million workers dragged into paying income tax
• 4 million workers into paying the highest rate of income tax
• expected to raise £45bn by 2028

Question 28

how did coorperation tax change recently?

Answer 28

increase from 19% to 25%

Question 29

on average how much is council tax expected to increase by?

Answer 29

5.7%

Question 30

how did interest rates change during covid?

Answer 30

cut to 0.1%