The Current Account Flashcards
1
Q
What do we see in services graphs?
A
Surplus.
2
Q
What are some positives of a weakening pound?
A
Exported growth
3
Q
Why do the UK run a current account deficit?
A
Strong Pound - exports expensive, imports cheap
Inflation - rising prices = less comp
Productivity - less productive = costs up
Quality - fall in quality = fall in demand
Falling incomes abroad
Rising Incomes at home
4
Q
What is the circular flow?
A
Money flowing around in a circle in the economy.
5
Q
What does persistent imbalance of a short run deficit on a current account show?
A
Fundamental disequilibrium.
6
Q
How do China have a massive competitive advantage over us?
A
Low cost labour, cannot compete with them.
7
Q
How do China have a massive competitive advantage over us?
A
Low cost labour, cannot compete with them.
