The UK's fragile foundations Flashcards
Why is it risky if the economy is relied upon one large sector?
- This is because if the sector plummets and therefore, results in less revenue, it would cripple the economy, as it would then lead to less money distributed to all the consumers in the UK.
What caused the productivity in the UK to go low?
- The lack of productivity growth is due to the weak business investment, which saw a slight decline in the last quarter, despite being favoured to certain tax conditions.
-When companies do not invest in new technologies, equipment or processes, productivity does not increase, limiting wage growth and overall economic prosperity.
What is the regional divide in the UK Economy?
- Employment rates vary slightly across the country. The South of England enjoying higher employment levels compared to regions like Wales, Northern Ireland, and the North of England.
-This division is largely due to the concentration of the services sector in the south, leaving manufacturing-dependant regions behind.
-The result also applies to economic opportunities and living standards.
What is the Trade Deficit Dilemma?
-The country continues to run a significant trade deficit in goods, partially offset by a surplus in services.
-It is concerning that Britain has not had a trade surplus in goods since the early 1980s.
-The decline of manufacturing has left the UK overly reliant on service industries, which may not be sufficient to sustain long-term economic health.
What is the definition of Business Investment?
- Expenditure by businesses on capital goods such as machinery, technology, and infrastructure to improve productivity.
What is Cyclical Upswing?
- A phase in the economic cycle where the economy grows due to favourable conditions, such as increased consumer spending or investment.
What is GDP per Capita?
- A measure of the total economic output of a country divided by its population, including average economic prosperity.
What is inflation?
-The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
What is Productivity?
-The efficiency of production, often measured as output per hour worked.
What is the Regional Disparities?
- Economic inequalities between different geographical areas within a country, often reflected in employment rates and income levels.
What is the Services Sector?
-The part of the economy that provides intangible goods, such as finance, education, and healthcare, rather than physical products.
What are the Structural problems?
- The long-term economic issues that affect the fundamental health of the economy, such as low productivity or poor investment.
What is a trade deficit?
- A situation where a country’s imports of goods exceed its exports, leading to more money leaving the economy than entering it.
