The G20 summit held in London is occuring against a backdrop of the worst global downturn since the Great Depression. The OECD warned that GDP for its 30 member countries is likely to fall by a record 4.3 per cent this year, against the 0.4 per cent drop that it forecast last November. The group …
Readers Question: we say that higher fiscal spending leads to higher economic growth but does this negative public saving also not lower investments hence lowering future growth opportunity? so is the current growth stimulus at a cost of future growth? Cutting taxes and boosting spending will lead to higher borrowing. This will hopefully boost aggregate …
Readers Question: What do you think would happen if all depositors of a bank requested their deposits? The Banking would probably collapse – unless it could secure unlimited funding from a Central Bank or other banks. If a bank has deposits of £10billion. The bank will keep perhaps 1% in liquid assets (i.e. cash that …