Trade (x-m)

Question 1

Current Account Deficit

Answer 1

3.2% of GDP

Question 2

Whats Business Productivity and investment like?

Answer 2

Weak in confidence
Due to Brexit
Higher costs for business

Question 3

Min Wage

Answer 3

£11.44/Hour

Question 4

What does a high min wage do for competitiveness

Answer 4

It reduces it due to firms costs rising who are in a competitive labor market, leading there to be higher prices for goods and services

Question 5

What’s the Exchange rate in Pound to Dollar, and what was it before?

Answer 5

Now £1=$1.24
Before £1=$1.60
WPIDEC

Question 6

What’s the exchange rate in Pound to euro, and what was it before?

Answer 6

Now £1= €1.16
Before £1= €1.40
WPIDEC

Question 7

Why is the UK not seeing improvements in the current account deficit at 3.2% of GDP, from a weak pound.

Answer 7

Due to 79% of UK services being Financial Services, these thus being non-price sensitive. Therefore not being bought for being ‘cheap’
Manufacturing only at 14% being price sensitive but something the 1) UK does not specialize in
2) Therefore, the UK does not benefit from cheaper exports and sees no improvement in the current account deficit.