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MACRO APPLICATION > THEME 2 > Flashcards

THEME 2 Flashcards

1
Q

Economic growth during Covid-19

A

UK economy shrinks 20.4% in April 2020
(fall in economic growth)

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2
Q

Real GDP after lockdown

A

slowly rising

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3
Q

Long term economic scars from pandemic

A
  • collapse of many retail businesses
  • hundreds of thousands of job losses in industries such as air transport, arts and entertainment
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4
Q

How did corona crisis affect migration?

A

decline in net inward migration of labour
- reduces country’s productive potential
- current shortage of labour = higher wages

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5
Q

Interest rates

A

UK interest rates reduced to 0.1% March 2020 (first lockdown)

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6
Q

Deflationary spiral

A

US 1929
- decreased real GDP by 25%
- unemployment reached 25%

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7
Q

How much gov rev does government get from taxing richest 1%?

A

27% of income tax in 2016

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8
Q

Quantitative easing

A

UK between 2009 and 2012 created £375bn

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9
Q

Hyperinflation

A

Germany 1920’s
bread rose from 200 marks to 200 trillion marks

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10
Q

Countries with negative interest rates

A

Sweden -0.5% from 2016 to Jan 2019

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11
Q

Government reducing unemployment

A

furlough scheme - 9.6 million workers covered by it

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12
Q

Inflation

A

UK inflation rate = 10.4% in Feb 2023

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13
Q

Increase cost of production

A

increase in oil and energy prices due to Russia-Ukraine war

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14
Q

Biggest contributors to inflation

A
  • housing and bills
  • food and drinks
  • restaurants and hotel
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15
Q

Public sector wages compared to inflation (2023)

A
  • prices = 10.4%, public sector = 4.8%
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16
Q

Private sector wages compared to inflation (2023)

A
  • prices = 10.4%, private sector = 7.0%
17
Q

UK interest rate and why

A

4.5% to combat inflation

18
Q

Unemployment rate December 2022

A

3.7%

19
Q

Forecast being wrong

A

March 2016 forecast UK investment positive trajectory
- actually fell during covid

20
Q

Supply side policy - government failure

A
  • HS2 - was £33bn now £71bn
  • expected by 2026, now between 2029 and 2033
21
Q

Corporation tax UK

A

19% risen to 25% (April 2023)
raise government rev by £20bn a year

MACRO APPLICATION (3 decks)

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