Readers Question If one looked at the UK’s Historical Debt to GDP ratio; at the time austerity was introduced; the Debt to GDP ratio was last at this 2010 level in 1966. Having lived in 1966 there was no massive economc requirement to reduce public spending at that time ie everything was fine. So was …
Definition of fiscal policy Fiscal policy involves the government changing the levels of taxation and government spending in order to influence aggregate demand (AD) and the level of economic activity. AD is the total level of planned expenditure in an economy (AD = C+ I + G + X – M) The purpose of Fiscal …
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 …
I studied PPE at Lady Margaret Hall, Oxford University between 1995-99. Quite often people ask me for tips on applying and the interview, so here are a few suggestions. Mock Interview Practise I also offer mock interview practice. Usually, I like to offer a two-hour session. This usually involves 75 minutes of interview and 45 …
Definition of crowding out – when government spending fails to increase overall aggregate demand because higher government spending causes an equivalent fall in private sector spending and investment. Question: Why does an increase in public sector spending by the government decrease the amount the private sector can spend? If government spending increases, it can finance …
The Lib Dems have proposed a budget rule that would run a persistent current budget surplus of 1%. This means that current spending (day to day costs of government) should always be less than tax revenue. Borrowing would only be allowed to finance capital investment after an independent watchdog found that the return would be …
This is a list of suggested economics reading which will help give a better understanding of the subject. It includes quite a range of perspectives from the ‘debunking of economics and free markets’ to Milton Friedman’s passionate defence of the free market. Whatever their perspective they all can add to our understanding. 50 Economics Ideas: …
The fiscal multiplier effect occurs when an initial injection into the economy causes a bigger final increase in national income. For example, if the government increased spending by £1 billion but this caused real GDP to increase by a total of £1.7 billion, then the multiplier would have a value of 1.7. Example of how …