Economics Department
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Economics Department |
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Intro to Macro Worksheet Source: ONS The UK's current account deficit widened further in 2002, in excess of £30bn, with almost all of this accounted for by a widening deficit on trade of goods. The situation has not been helped by the strong pound, which has been high since the Asian crisis of 1997, and has remained strong in recent years following the collapse of the dollar. This should mean that the deficit remains wide, especially when other factors such as the ongoing consumer boom in the UK combined with slow growth in both the US and the Euro area are factored in. 1) What is meant by the 'Current Account Deficit', and how does this differ from the trade deficit? (3 marks) 2) Why might the Government be concerned by the figures shown above? (4 marks) 3) Why might the 'strong pound' explain at least part of the problem? (4 marks)
Source: ONS Unemployment remains low in the UK, one of the lowest rates in the EU. After a small rise towards the end of 2002, unemployment has resumed its gradual downward trend. On the claimant count definition, UK unemployment is even lower, down at around 3%. 4) What is meant by 'unemployment'? (2 marks) 5) How does the 'claimant count' definition differ from the ILO defintion? (3 marks) 6) Why might unemployment figures have shown the pattern in the diagram above? (5 marks) 7) Why might the Government seek to ensure low levels of unemployment? (5 marks)
Source: ONS 8) What is meant by RPIX Inflation? (3 marks) 9) Why does the Government care about inflation? (6 marks) 10) What might have caused the changes in inflation over the period shown? (6 marks)
Source: ONS 11) What is meant by 'growth in UK real GDP? (3 marks) 12) Why does the Government care about GDP Growth? (5 marks) 13) What factors might account for the pattern shown in the diagram above? (5 marks) 14 ) Show the impact of Economic Growth using (a) PPFs and (b) AS/AD (6 marks) Total: 60 Marks |
