Up learn first attempt

Question 1

Explain one likely effect on the uk economy of this increase in FDI inflows

Answer 1

The 164 billion increase in FDI inflows into the Uk economy may create significant economic growth investment is a compony of AD so as FDI increase aggregate demand will also increase with a positive muliterpler effect leading to an increase in the UKs real national output

Question 2

Examine why teh US fiscal deficit increased from 3.1 percent to 9.8 % of GDP in 2009

Answer 2

Increased welfare spending payments as unemployment rose and average incomes fell in the wake of the global finical crisis
Fewer people in work reduce thenumberf of paying income tax while as average incomes fall workers move down the progressive tax bands

Question 3

Examine why teh US fiscal deficit increased from 3.1 percent to 9.8 % of GDP in 2009 eval

eval
eval

Answer 3

Protrisation was the increase all down to cyclical factors or did the structural fiscal deficit increase also

Difficulty of making judgements when the data is presented as a % od GDP and GDP fell during this period too meaning the increase in the fiscal deficit in monetary terms is likely to be smaller than thought

Prioterisation which had a greater effect
How much of the increase was due to increased government spending and how much to fall in tax revenue

Question 4

Asesses the likely significance of the US national debt for the economy

Answer 4

Taxes may have to rise in the future government spending may have to fall in the future to reduce the national debt

May have a negative effect on business confidence

The cost of finicking the debt will rise and this money has an oppturnity cost

Question 5

Asesses the likely significance of the US national debt for the economy

Eval eval eval

Answer 5

Greater generational inequality future generation have to pay it back
Crowding out is unlikely cost of US government borrowing is near zero despite rising national debt

Question 6

Discuss the likely impact of the new tax changes on inequality within the USA
tax rate falls
Eval

Answer 6

Gini coeficnet as a measure of income inequality
It depends what kind of ineqality we are looking at income or wealth and weather we are looking at inequality between the whole population

It is only the maximum rate of corporation tax which is being cut is other rates will vary by less reducing the likely effects of this cut
Many other deductions are being eliminated so it is difficult to make an overall judgement without more information

The team break on foreign profits could just encu=ourage the off shoring of production invesmyt and employment limiting the benefits to US intentional competivemness