Main topics in macroeconomics Balance of payments Policies to reduce current account deficit Budget deficit Policies to reduce budget deficit Economic growth Causes of Boom and Bust Cycles Policies to increase economic growth Theories of economic growth Recessions Environmental economics Fiscal policy Globalisation Exchange rates Effect of an appreciation Effect of devaluation European Union The …
Readers Question: why some countries are more successful in attracting Foreign Direct Investment than others? Foreign direct investment (FDI) means companies purchase capital and invest in a foreign country. For example, if a US multinational, such as Nike built a factory for making trainers in Pakistan; this would count as foreign direct investment. In summary, …
Economics affects our daily lives in both obvious and subtle ways. From an individual perspective, economics frames many choices we have to make about work, leisure, consumption and how much to save. Our lives are also influenced by macro-economic trends, such as inflation, interest rates and economic growth. Summary – why economics is important The …
Traditionally, the key measures of economic performance in macroeconomics include: Economic growth – real GDP growth. Inflation – e.g. target CPI inflation of 2% Unemployment – target of full employment Current account – satisfactory current account, e.g. low deficit. Other measures of economic performance can include: Government borrowing/national debt Real disposable incomes Income inequality (Gini …
Economic growth means an increase in real GDP. Economic growth means there is an increase in national output and national income. Economic growth is caused by two main factors: An increase in aggregate demand (AD) An increase in aggregate supply (productive capacity) See latest stats on economic growth Demand-side causes In the short term, economic …
Economic growth means an increase in national income/national output. If we have a slower rate of economic growth – living standards will increase at a slower rate. For example, in the post-war period, western economies grew at 2.5% to 4.% per year. However, since the early 2000s, growth rates have slowed down. This process of …
Different models of economic growth stress alternative causes of economic growth. The principal theories of economic growth include: Mercantilism – Wealth of a nation determined by the accumulation of gold and running trade surplus Classical theory – Adam Smith placed emphasis on the role of increasing returns to scale (economies of scale/specialisation) Neo-classical-theory – Growth …
The March 1981 UK budget was controversial. In a period of rising unemployment, recession and high inflation. The government pursued deflationary fiscal policy trying to reduce inflation. The chancellor increased taxes by a total of £4 billion, with the aim of reducing inflation and reducing the budget deficit. Tax measures included A new 20% tax …