In 1952 when Queen Elizabeth II came to the throne, the UK was a major economic power, but still reeling from the costs of the Second World War, with rationing and austerity still visible. The post-war period saw a remarkable rising living standards, strong economic growth and radical changes in the economy, but also saw …
Rising petrol, food and energy prices have pushed many households in the UK and around the world into an unprecedented cost of living crisis. In the UK, in March 2022 the ONS reports that 23% of households found it difficult to pay their monthly bills. The cost of living crisis is fundamentally caused by higher …
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 …
What are some of the biggest misconceptions about how the economy works? Some misconceptions Economists can make reliable forecasts. Presidents control the economy – Policies of government only partially responsible for economic activity. Luddite fallacy. – Misconception that new technology destroys jobs. Broken window fallacy – Misconception paying for damage creates economic activity. The lump …
An appreciation means an increase in the value of a currency against other foreign currency. An appreciation makes exports more expensive and imports cheaper. An example of an appreciation in the value of the Pound 2009 – 2012 Jan 2009 If £1 = €1.1 June 2012 £1 = €1.27 In this case, we can say …
Over time, the IMF has been subject to a range of criticisms, generally focused on the conditions of its loans. The IMF has also been criticised for its lack of accountability and willingness to lend to countries with bad human rights records. Criticisms of the IMF include 1. Conditions of loans On giving loans to …
The J Curve effect a depreciation in the exchange rate can cause a deterioration of the current account in the short-term (because demand is inelastic). However, in the long-term, demand becomes more price elastic and therefore, the current account begins to improve. The J-Curve is related to the Marshall-Lerner condition, which states: If (PED x …