This document contains information for an AS Macroeconomics revision workshop in March 2015. It includes discussion of aggregate demand and supply, the economic cycle, key macroeconomic indicators in the UK, components of aggregate demand, foreign direct investment into the UK, and factors affecting consumption and investment. The workshop covers topics like recessions, inflation, fiscal and monetary policy, and productivity to help students prepare for their exams.
Preparing for the AS Economics Macro Paper 2012tutor2u
This comprehensive revision presentation by tutor2u Co-founder Geoff Riley is designed to provide support for AS Economics students (and their teachers) in the final stages of their revision for the Unit 2 paper on macroeconomics.
Preparing for the AS Economics Macro Paper 2012tutor2u
This comprehensive revision presentation by tutor2u Co-founder Geoff Riley is designed to provide support for AS Economics students (and their teachers) in the final stages of their revision for the Unit 2 paper on macroeconomics.
This is an updated version of a slideshow revision presentation on the way in which different charts are presented in economics exams and some tips for handling the data in your answers.
This is a suggested answer to an exam-style question (for AS macro) on whether the Bank of England should start to raise interest rates to help sustain the UK economic recovery.
This is a video recording of a live AS macro revision webinar that looked at some examples of external demand and supply-side shocks that can affect countries such as the UK. In the video I explained six key "shock absorbers" - ways in which a country might be better placed to cope with the impact of world demand, supply and financial shocks to their economic systems.
This is an updated version of a slideshow revision presentation on the way in which different charts are presented in economics exams and some tips for handling the data in your answers.
This is a suggested answer to an exam-style question (for AS macro) on whether the Bank of England should start to raise interest rates to help sustain the UK economic recovery.
This is a video recording of a live AS macro revision webinar that looked at some examples of external demand and supply-side shocks that can affect countries such as the UK. In the video I explained six key "shock absorbers" - ways in which a country might be better placed to cope with the impact of world demand, supply and financial shocks to their economic systems.
Mercer Capital's Value Focus: Auto Dealer Industry | Mid-Year 2015Mercer Capital
Mercer Capital's Auto Dealer Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.
Fiscal Policy (Austerity) in the UK Economytutor2u
In this short revision video I try to explain some of the key arguments for and against the policy of fiscal austerity being carried out by the conservative government in an attempt to cut the budget deficit and control / reduce the scale of government debt as a share of GDP. It is essentially a debate between fiscal conservatives and Keynesian economists!
Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.
In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.
There is a lot of concern about the sustainability of the economic recovery. As a result, the Belgian Federal Planning Bureau revised its GDP growth forecast 2014 downwards.
What can we expect ?
Similar to AS Macroeconomics - The Economic Cycle (April 2015) (20)
In this revision presentation we look at recent trends in UK trade union membership, consider how trade unions can affect both pay and employment and challenge the textbook view that union-negotiated pay increases inevitably have negative consequences for employment.
In this revision presentation we cover key examples of pure and quasi public goods and consider the arguments for and against an increase in government spending on public goods.
Poverty Reduction Policies in Low Income Countriestutor2u
This revision presentation covers some of the main causes of continued high levels of extreme poverty in low and middle income countries and considers a range of pro-poor government interventions designed to increase productivity and regular employment and waged income in formal labour markets.
You don’t need to produce a lot of evidence in your macroeconomics exams but knowing some basic and key facts and figures can make your answers stand out from the crowd! Here is a quickfire journey through twenty important economic numbers that won’t change before the exam – use them to support your answer and impress the examiner!
Microeconomics - Great Applied Examples for Examstutor2u
In this presentation, I have chosen loads of current examples that you might want to use as context in your microeconomics exams. We look at examples from different market structures, recent mergers and takeovers, the world's most valuable companies, the largest employer, unicorn business, de-mergers, the biggest initial public offerings (IPOs) and much else. Hopefully a useful video to go through to add some super examples into your revision notes.
This revision presentation considers the variety of stakeholders impacted by business activity. How will a change in objectives, such as a move from profit maximisation to revenue maximisation have an effect on different stakeholders?
This revision presentation looks at profit satisficing as an alternative objective for businesses. Why might firms satisfice? What are some of the possible consequences for economic welfare and efficiency?
In this short revision video, we look at the substantial productivity gap between the UK and many of the UK’s major competitor countries.
Paul Krugman, the Nobel Prize-winning economist said twenty fives years ago that “Productivity isn’t everything, but in the long run it is almost everything,”
In this presentation we consider the theory of wage-setting with a monopsony employer and the possible impact that a trade union might have on wages and employment. We also look at efficiency wage theory and mutual gains from pay bargaining between stakeholders.
For many economists, the labour market is the most important market of all to study, analyse and evaluate. Like product markets for goods and services, labour markets can also fail. The main types of labour market failure are labour immobility including skills gaps, inequality, disincentives to be economically active, labour market discrimination and the effects of monopsony power of employers.
Updated revision presentation on aspects of behavioural economics and topical issues where behavioural nudges are being used to change the choices of consumers and businesses.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
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What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
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when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
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As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
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The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.
AS Macroeconomics - The Economic Cycle (April 2015)
1.
2. AS Macro-Economics - March 2015
AS Macro-Economics Revision Workshop
March 2015
Revision Support
Geoff Riley @tutor2u_econ
Website: www.beta.tutor2u.net
Page 3
3. AS Macro-Economics - March 2015
Linda Yueh
@lindayueh
Robert Peston
@Peston
Kamal Ahmed
@BBCkamal
Keep following the business and
economics news as part of your revision!
4. AS Macro-Economics - March 2015
AS Macro-Economics Revision Workshop
March 2015
Session 1:
Aggregate Demand, Aggregate Supply
and the Economic Cycle
Page 3
7. AS Macro-Economics - March 2015
Recession in
Ireland
Fall in
demand for
Irish imports
Inward shift
in demand
for UK
exports
Fall in
aggregate
demand
Contraction
of short run
aggregate
supply
8. AS Macro-Economics - March 2015
Recession in
Ireland
Fall in
demand for
Irish imports
Inward shift
in demand
for UK
exports
Fall in
aggregate
demand
Contraction
of short run
aggregate
supply
AD2
Y2
9. AS Macro-Economics - March 2015
Recession in
Ireland
Fall in
demand for
Irish imports
Inward shift
in demand
for UK
exports
Fall in
aggregate
demand
Contraction
of short run
aggregate
supply
AD2
Y2
Evaluation
Significance of Ireland as an
export market for the UK
10. AS Macro-Economics - March 2015
Awareness
Low productivity is one of the
most important supply-side
problems facing the UK
11. AS Macro-Economics - March 2015
Improved
efficiency
Causes fall in
unit costs
Outward
shift of
aggregate
supply
Fall in the
price level
Expansion of
aggregate
demand
Awareness
Low productivity is one of the
most important supply-side
problems facing the UK
12. AS Macro-Economics - March 2015
Improved
efficiency
Causes fall in
unit costs
Outward
shift of
aggregate
supply
Fall in the
price level
Expansion of
aggregate
demand
SRAS2
Y2
Awareness
Low productivity is one of the
most important supply-side
problems facing the UK
13. AS Macro-Economics - March 2015
Analysis
A rise in VAT would be an
example of fiscal austerity –
designed to raise revenues
14. AS Macro-Economics - March 2015
VAT is a tax
on
producers
Inward shift
of aggregate
supply
Rise in the
general price
level
Fall in real
incomes of
consumers
Contraction
of aggregate
demand
Analysis
A rise in VAT would be an
example of fiscal austerity –
designed to raise revenues
15. AS Macro-Economics - March 2015
VAT is a tax
on
producers
Inward shift
of aggregate
supply
Rise in the
general price
level
Fall in real
incomes of
consumers
Contraction
of aggregate
demand
SRAS2
Y2
P2
Analysis
A rise in VAT would be an
example of fiscal austerity –
designed to raise revenues
16. AS Macro-Economics - March 2015
Knowledge
What is the difference
between a budget deficit and
the national debt?
17. AS Macro-Economics - March 2015
Budget
deficit – G is
> than T
Injection of
aggregate
demand
Outward
shift of AD
Expansion of
real GDP
Might also
cause higher
prices
Knowledge
What is the difference
between a budget deficit and
the national debt?
18. AS Macro-Economics - March 2015
Budget
deficit – G is
> than T
Injection of
aggregate
demand
Outward
shift of AD
Expansion of
real GDP
Might also
cause higher
prices
Knowledge
What is the difference
between a budget deficit and
the national debt?
AD2
Y2
19. AS Macro-Economics - March 2015
In AS Macro it is really
important to ALWAYS have in
mind the key objectives of
macro economic policy
Refer back to them frequently
20. AS Macro-Economics - March 2015
Page 3
Price Stability – i.e. Low
Positive Inflation
(CPI Inflation of 2%)
Sustainable Growth of
Real GDP (National
Output)
Falling Unemployment
Higher Average Living
Standards (real national
income per capita)
Improved
Competitiveness / Trade
Performance
Equitable Distribution of
Income and Wealth
21. AS Macro-Economics - March 2015
Page 3
Price Stability – i.e. Low
Positive Inflation
(CPI Inflation of 2%)
Sustainable Growth of
Real GDP (National
Output)
Falling Unemployment
Higher Average Living
Standards (real national
income per capita)
Improved
Competitiveness / Trade
Performance
Equitable Distribution of
Income and Wealth
22. AS Macro-Economics - March 2015
Page 3
Price Stability – i.e. Low
Positive Inflation
(CPI Inflation of 2%)
Sustainable Growth of
Real GDP (National
Output)
Falling Unemployment
Higher Average Living
Standards (real national
income per capita)
Improved
Competitiveness / Trade
Performance
Equitable Distribution of
Income and Wealth
23. AS Macro-Economics - March 2015
Page 3
Price Stability – i.e. Low
Positive Inflation
(CPI Inflation of 2%)
Sustainable Growth of
Real GDP (National
Output)
Falling Unemployment
Higher Average Living
Standards (real national
income per capita)
Improved
Competitiveness / Trade
Performance
Equitable Distribution of
Income and Wealth
24. AS Macro-Economics - March 2015
Page 3
Price Stability – i.e. Low
Positive Inflation
(CPI Inflation of 2%)
Sustainable Growth of
Real GDP (National
Output)
Falling Unemployment
Higher Average Living
Standards (real national
income per capita)
Improved
Competitiveness / Trade
Performance
Equitable Distribution of
Income and Wealth
25. AS Macro-Economics - March 2015
Page 3
Price Stability – i.e. Low
Positive Inflation
(CPI Inflation of 2%)
Sustainable Growth of
Real GDP (National
Output)
Falling Unemployment
Higher Average Living
Standards (real national
income per capita)
Improved
Competitiveness / Trade
Performance
Equitable Distribution of
Income and Wealth
26. AS Macro-Economics - March 2015
Boom
Slowdown
Recession
Recovery
A cycle is when GDP growth fluctuates around the trend (or underlying) growth
27. AS Macro-Economics - March 2015
Gross domestic product (GDP) growth rate in the United Kingdom 2018
UK Real gross domestic product (GDP) growth rate from 2008 to 2018
(compared to the previous year)
Note: Great Britain
-0.77%
-5.17%
1.66%
1.12%
0.28%
1.74%
3.21%
2.71%
2.44% 2.39% 2.42%
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
2008 2009 2010 2011 2012 2013 2014* 2015* 2016* 2017* 2018*
GDPgrowthratecomparedtopreviousyear
28. AS Macro-Economics - March 2015
AGGREGATE DEMAND =
C I G X M
CONSUMER
EXPENDITURE
INVESTMENT
GOVERNMENT
SPENDING EXPORTS IMPORTS
Page 3
30. AS Macro-Economics - March 2015
Data Interpretation
Page 4
2009 sees a decrease in each
component apart from
government spending (which
increased by 1.2%). For
example, capital investment
decreased by 14.2%.
The figures do not follow a
constantly increasing or
decreasing trend for any of
the components. For
example, consumption and
investment increased in 2014
(by 2.9% and 8.1%) whereas
import and export growth
decreased (1.3% and 1.6%).
Significant feature 1 Significant feature 2
31. AS Macro-Economics - March 2015
Spending on R&D as percentage of GDP
Page 6
Source OECD, 2014
South Korea Germany USA
4.01 2.91 2.79
France China UK
2.26 1.99 1.72
32. AS Macro-Economics - March 2015
1.72% 0.69% 2.2% 3.4% 1.75%
Higher or
Lower?Lower
Higher or
Lower?Higher
Higher or
Lower?Higher
Higher or
Lower?Higher
UK GREECE BELGIUM SWEDEN IRELAND
Source OECD, 2014
Start:
R&D Higher or Lower!
Page 6
34. AS Macro-Economics - March 2015
Page 6
Global FDI position in the United Kingdom (UK) 2004-2013
Total value of global foreign direct investment (FDI) in the United
Kingdom from 2004 to 2013 (£ billion)
Note: United Kingdom; 2004 to 2013
363.42
488.21
580.31
620.42
660.37 681.27
725.56
792.66
960.09 975.43
0
200
400
600
800
1000
1200
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ForeigndirectinvestmentinbillionGBP
£1,000m = £1 trillion
35. AS Macro-Economics - March 2015
Nissan, Sunderland Cummins Power Generation, Ramsgate
AkzoNobel, Ashington Siemens, Hull
Examples of foreign direct investment into the UK
36. AS Macro-Economics - March 2015
Exam Question: To what extent is inward investment
important to the UK economy?
Page 7
Reason why it is important: Critical evaluation
1. Inward FDI can lead to
higher real GDP growth
2. FDI creates more jobs
without the need for
increased government
spending and borrowing.
1. Capital intensive FDI may
not lead to a sizeable
boost to jobs for home-
economy workers.
2. Profits from FDI may be
remitted overseas or the
corporation tax avoided
Support with a good analysis diagram!
37. AS Macro-Economics - March 2015
Awareness
The “Google Tax” is
expected to raise
an extra £300-
£400m each year
from 2016 onwards
This is a small
figure in
comparison to the
main sources of tax
revenue such as
income tax and VAT
38. AS Macro-Economics - March 2015
Page 7 & 8
Look at these factors that affect aggregate demand. Which two
have the biggest impact on consumption and investment and why?
Disposable income
falls
A decrease in VAT
An increase in income
tax
An increase in savings
rate
A decrease in interest
rates
A decrease in
investment by private
sector firms
A decrease in
Government
spending on the
Armed forces
Exchange rate
increases
Trade agreements
with BRIC nations
Increased productive
and allocative
efficiency in MINT
nations
Increased spending
on the NHS
A decrease in income
tax
An increase in
investment by UK car
manufacturers
An increase in
Government
spending on overseas
aid
An increase in
unemployment
A decrease in the
saving rate
An increase in the
minimum wage
A slump in the
housing market
Financial crisis in the
USA
An increase in VAT
Exchange rate
decreases
An increase in
interest rates
A reduction in
confidence by
consumers
A general increase in
share prices
Continued recession
in Eurozone area
39. AS Macro-Economics - March 2015
Fall in the rate of income tax
A reduction in the basic rate of
income tax will increase the
disposable incomes of millions
of people in work
Which impact on consumption? Why is this most significant?
Increase in the minimum wage
Raising the take home pay of
lower-paid workers, many of
whom a high propensity to
consume any extra income
Page 7 & 8
40. AS Macro-Economics - March 2015
Real
Disposable
Income
(i.e. Income
adjusted for
inflation &
after direct
taxes and
benefits
Employment
and Job
Security
When
employment is
rising,
confidence and
incomes may
improve
Household
Wealth
(House prices,
share prices) –
a rise in wealth
can boost
consumer
demand
Expectations
and Sentiment
The state of
confidence or
pessimism is
known as
animal spirits
Market
Interest Rates
Interest rates
affect the
incentive to
save and the
cost of
borrowing
Key factors affecting consumer spending (macro)
41. AS Macro-Economics - March 2015
Decrease in interest rates
Makes borrowing less expensive
and therefore makes potential
investment projects more
profitable.
Which impact on investment? Why is this most significant?
Continued recession in the
Eurozone area
A fall in UK exports to the Euro
Zone will cause a rise in spare
capacity and lower profits –
both leading to less investment
Page 7 & 8
42. AS Macro-Economics - March 2015
Page 8
Expectations play a key role
for businesses
Macroeconomic uncertainty
hits planned investment
Actual &
expected
demand
Expected
profits and
business
taxes
Interest rates
+ availability
of finance
Business
confidence
Key factors affecting investment (macro)
43. AS Macro-Economics - March 2015
AS Macro:
Evaluation
Question
Evaluate the view that a
continued fall in the value
of the Euro has the largest
impact upon aggregate
demand in the UK
44. AS Macro-Economics - March 2015
Evaluate the view that a continued fall in the value of the Euro has the
largest impact upon aggregate demand in the UK. Argument 1:
Point
Analysis
Evaluation
Fall in value of Euro makes European imports
cheaper in the UK.
A depreciation of the Euro means that imported
products purchased from Euro Area countries
will cost less. This will cause UK consumers to
switch their spending to overseas products
Consumers make decisions on non-price factors
too such as product quality / brand reputation
Page 9
45. AS Macro-Economics - March 2015
Fall in the Euro will hit UK exporters causing a
negative multiplier effect on AD
British exporters will find it hard to sell to EU
markets and Europe is our biggest export
market. A fall in exports will cause a negative
multiplier effect leading to a big decline in GDP
1. Exporters might be able to switch towards
export markets of other regions such as Asia
2. The pound may have fallen against other
currencies such as the US dollar
Page 9
Point
Analysis
Evaluation
Evaluate the view that a continued fall in the value of the Euro has the
largest impact upon aggregate demand in the UK. Argument 2:
46. AS Macro-Economics - March 2015
The fall in the Euro might only be a temporary
change in the exchange rate
Weakness of the Euro reflects the economic
difficulties of many EU countries such as Greece
and Spain; these countries will recover in time
The Euro is likely to be a weak currency for
some time to come, so British firms will need to
think longer term about how to become more
competitive
Page 9
Point
Analysis
Evaluation
Evaluate the view that a continued fall in the value of the Euro has the
largest impact upon aggregate demand in the UK. Argument 3:
47. AS Macro-Economics - March 2015
International (External) Competitiveness
External competitiveness is the ability to sell goods and services at
competitive prices in a foreign country
• Cost competitiveness – differences in unit costs between
producers – reflected in prices
• Non-price competitiveness – product quality, design,
reliability and performance, choice, after-sales services,
marketing, branding and the availability and cost of
replacement parts
• Non-wage costs:
• Costs of meeting environmental / health regulations
• Environmental taxes e.g. carbon taxes and waste taxes
• Employment protection laws and health and safety laws
• Requirements to provide pensions for employees
48. AS Macro-Economics - March 2015
Policies to Improve International Competitiveness
Improving Labour Markets
• Investment in education , management
• Encouraging inward migration of skilled workers
Infrastructure Investment
• Better motorways, ports, hi-speed rail
• Communications e.g. super-fast broadband, 4G
Supporting Enterprise / Entrepreneurship
• Improved access to business finance
• Incentives for innovation and invention
Macroeconomic Stability
• Maintaining low inflation / price stability
• A sustainable banking system
49. AS Macro-Economics - March 2015
AS Macro-Economics Revision Workshop
March 2015
Revision Support
Geoff Riley @tutor2u_econ
Website: www.beta.tutor2u.net
Page 3