Th4.1: Long Term Causes - Deficits and Surpluses

Question 1

Much of the UK’s trade deficit is due to what kind of factors?

Answer 1

structural rather than cyclical factors, due to supply side deficiencies

Question 2

What will a lack of capital investment mean?

Answer 2

firms use older more out of date technology, contributing to a lack of productivity

Question 3

What has deindustrialisation in the UK lead to?

Answer 3

a decrease in the relative importance of industry and manufacturing in the economy - this make it more difficult to export since services are harder to export

Question 4

Countries with what two things are likely to export more and have a small population?

Answer 4

countries with a large amount of natural resources tend to export more and a small population country tends to have a current account surplus

Question 5

Some countries are more…

Answer 5

more competitive than others e.g reputation for high quality

Question 6

Countries with what find it difficult to export?

Answer 6

countries with corruption and where it is difficult to set up a business

Question 7

What are five possible long term causes of deficits and surpluses?

Answer 7

lack of productivity
deindustrialisation
natural resources
more competitive
corruption