Economics

Question 1

MPC decision on 3 Nov. 2022
What was happening simultaneously in gilt markets?
How was forward planning used?

Answer 1

+0.75% increase to 3%
Record high since GFC

Bank has started “quantitative tightening” - selling gilts to cause a decline in money supply growth

Minutes indicated rates wouldn’t rise to the 5.25% priced in by markets

Question 2

Breakdown of UK aggregate demand

Answer 2

C. - 65
I. - 15
G. - 22
X-M. - -2

Question 3

What % of poor countries are at or near debt distress?

Amount of world debt? Implications?

Answer 3

60% - countries unable to fully fulfill financial obligations

$300 trillion in 2021, record amount and up from $226 in 2020

Poorest will be worst hit. Less money to key industries and increasing interest rates increase repayments.

Question 4

Why has Julie Hunter launched a lawsuit against against Amazon in the UK?
Any similar cases?

Answer 4

For anti-competitive practices. Alleges they have been featuring their own products despite better products being available.
Seeking £900m

European Comission investigating amazon 2x as well

Question 5

How is Australia using its factor endowment to “challenge China”

Answer 5

Opening a new rare earth metal mine in Central Australia. Have strategic value and China have threatened restricting exports.

Question 6

How does M&S’ 5-year plan (now aimed for 3-years) reflect changing economy?

Answer 6

Losing 67 “full-line” stores to lose space

50% of sales now come from online

Question 7

How much of US inflation is driven by corporate profits?

Answer 7

“53%, historical highs.” Congresswoman Katie Porter

Question 8

Why have we averaged 2% growth in 2010-2019 but no increase in disposable income

Answer 8

Growth has been driven by consumption, not investment and so productivity has been stagnant

Question 9

When did income inequality start rising

Answer 9

1970s, until then an increasing number of wages went to labour but since then it has fallen. More goes to owners of capital / stocks.

Question 10

Between 1979 and 2012, what do the “distributional national accounts” show.

Answer 10

Bottom 50% received 10% of growth while the richest 10% gained 40%

Question 11

Why did binance pull out of a takeover of FTX?
How many withdrawals did FTX have to cover?

Answer 11

Liquidity issues “beyond our control or ability to to help”.

Has to cover $8B in withdrawal requests.

Question 12

How many workers do Meta plan lay off? What are it’s priorities? (November)

Answer 12

11,000 (13% of workers)

Will focus on high growth tech (AI, advertising, metaverse etc. ) as revenue wasn’t as stable as expected during covid.

Question 13

Why has Bangladesh made a $4.5B deal with the IMF?
How many countries have done it so far this year? (Nov 2022)

Answer 13

Struggling economy. High growth in recent years challenged by weakening demand for garment exports and high inflation.

3 including Bangladesh

Question 14

How much does the Inter-American Development Bank invest per year in Latin America?

Answer 14

$14B

Question 15

How much revenue did Yeezy bring in for Adidas?

Why have sportswear brands been struggling?

Answer 15

$1.5B (12% of revenue)

Lots of surplus stock

Increased competition addressing environmental concerns especially

Question 16

Example of Indonesia’s factor endowment?

Answer 16

Contains 21m tonnes of nickel, 1/5 of world supply. Needed for electric car batteries.

Question 17

How did the services industry contribute to Gross Value Added in 2021 to the UK economy?

Answer 17

Contributed $1.7T, 80% of the total.

Question 18

How much less would a women from a working class background earn in a professional managerial role?

What about the general class pay gap for the same jobs?

Answer 18

£9450

£6718

Question 19

What did Germany offer $170m for at COP?

Answer 19

To help countries recover from climate related disasters. The project needs $210m to start

Question 20

Why are taxes as % of GDP at their highest in almost 4 decades

Answer 20

Slow growth and ageing population means more spending needed.
Does not mean better public services.

Question 21

Public and private investment as % of GDP in 2022 vs other G7 countries?

Answer 21

Predicted 17% (keep updated) vs predicted 22-26%

Question 22

Peak value of cryptocurrencies last year vs now (November)

Answer 22

$3trn vs &$830B

Question 23

Predicted fall in disposable income Apr 2022-23

Answer 23

4.8%

Question 24

How did the autumn statement split savings via tax rises vs spending

Answer 24

20% tax rises
80% spending

Question 25

What is energy intensity of GDP and how has it changed in the US

Answer 25

The amount of energy needed per unit of GDP. It has fallen, USA's GDP up 29% from 2005 and its territorial emissions down 15%

Question 26

How many countries have achieved energy decoupling and what is it

Answer 26

The separation of GDP from CO2 emissions. Around 32 countries, mainly rich European economies and the US bit some South American too.

Question 27

Losses incurred by Disney+ July-Sep

Answer 27

$1.5B

Question 28

How much tax did BP and Shell pay from 2015-2020

Answer 28

They paid "negative tax" they received more money from the government than tax paid apart from Shell in 2017.

Question 29

Worker remittances as % of GDP in Nepal

Answer 29

around 23%, much greater than FDI or overseas development aid

Question 30

What is tiered pricing, how is it used in Santa Fe

Answer 30

Having a certain price up to a certain quantity, and then paying progressively more. Used in Santa Fe for water: all families are provided with the essentials and then richer ones pay more for excesses i.e. washing the car or watering the lawn

Question 31

How energy efficient are Britain's 30m

Answer 31

Some of the worst in Europe 1/3 were built before 1945

Question 32

Estimated damage done to Pakistan by the summer floods

Answer 32

$30bn

Question 33

What did the World Bank chief warn about (Dec)

Answer 33

Growing debt burdens on poorer countries (35% more than 2021), and a need to be more forgiving (especially China as the largest lender)

Question 34

What was the likelihood of several big price moves in markets in August 2007, according to Goldman's models?

Answer 34

Each one should have been less likely than winning the UK lottery 21 times in a row.

Question 35

Who wrote the Theory of Moral Sentiments

Answer 35

Adam Smith, he sought to link ethics with our innate sympathy/ empathy with one another.

Question 36

How much did Microsoft agree to pay to merge with Activision-Blizzard in Jan 2022

Answer 36

$16b

Question 37

How many regulators worldwide have taken interest in Activision/Microsoft merger

Answer 37

16

Question 38

Since when and where has the biggest rise in inequality across developed countries been? (post-ww2)

Answer 38

In the US and UK, post-1980s

Question 39

How much of our imported food do we get from the EU

Answer 39

75%

Question 40

How does Adobe show a proposed takeover can cause problems for a firm?

Answer 40

Investors thought they were paying too much ($20B) for Figma and sent their stock price down.

Question 41

Up to date example of a joint venture (aviation)

Answer 41

Rolls-Royce and EasyJet powered a modern plane engine with green hydrogen. Helps both towards net-zero commitments

Question 42

House prices in Northern Ireland relative to pre-GFC

Answer 42

Still below pre-GFC peak

Question 43

How long are median house prices expected to fall in the UK

Answer 43

Until Autumn 2024 (OBR)

Question 44

How many branches will HSBC close from April 2024

Answer 44

114

Question 45

How has Brexit affected UK food bills, according to LSE

Answer 45

Added "£210" to the average bill. Non-tariff barriers like additional checks/ paperwork. Up to 88% of price rises being passed on, esp. for meats

Question 46

How did the British airline cap and trade scheme fail in 2021

Answer 46

Government gave away 4.4 million at the start of the year and the industry only used 3.4, essentially £240 million subsidy. ...due to depressed demand from COVID

Question 47

How has TotalEnergies responded to the increase in the Energy Profits Levy?

Answer 47

Cut 25% (£100m) of its planned investment

Question 48

What are the "Edinburgh Reforms"

Answer 48

"Biggest financial services shake-up in decades", says the government. Will aim to cut red-tape, most likely repealing post-GFC regulations

Question 49

What did the WTO say about Trump's steel tariffs? How has the US responded

Answer 49

They broke WTO rules Biden said he stood by them, to protect steel industry. Shows increasingly shaky governancee of global trade.

Question 50

Breakdown of recent telecom merger in Canada? How much do Candians pay for wireless broadband.

Answer 50

$20B merger makes the second biggest canadian provider. Originally blocked then overturned. They already pay the highest bills in the world.

Question 51

What did the head of the IMF predict about the world economy in 2023?

Answer 51

That one third of the world will fall into recession

Question 52

What has Sweden discovered in the North of its country

Answer 52

A large rare earth metal deposit, will take 10 years to bring to market

Question 53

First month that inflation in America fell since May 2020? (disinflation)

Answer 53

Dec 2022, fell by .1%

Question 54

Amount of domestic American subsidies for green industries

Answer 54

$465B

Question 55

Why is americas justice department suing Google

Answer 55

For illegally dominating the online advertising market

Question 56

How much does Adani spend on capital spending in India

Answer 56

7% of all spending by top 500 companies

Question 57

Shell profit 2022

Answer 57

$40B - record profit

Question 58

Indonesia's GDP growth 2022,relative to other years

Answer 58

5.3%,most in 9 years

Question 59

Recent example of brain drain

Answer 59

IT workers in belarus - 20,000 of estimated 60,000 workers have left since the war.

Question 60

What's happened to JetBlues $3.8b purchase of Spirit Airlines

Answer 60

Sued by American government - budget airline monopoly

Question 61

How much will the poorest countries have their debt costs increase by in 2023

Answer 61

+35%

Question 62

Country that pays more on debt service than exports/ primary income

Answer 62

Mozambique - debt worth 400% of GNI

Question 63

Industry with high MES, why is this the case?

Answer 63

Pharmaceuticals: Bulk purchasing of raw materials Economies of scope/ efficient use of manufacturing facilities High costs of R+D - need high output to offset costs

Question 64

Estimated cost of bringing a drug to market in the US

Answer 64

$3bn

Question 65

When did UK wages start stagnating? How much has this cost the average British worker?

Answer 65

2008 - cost around £11000 a year

Question 66

Country with lowest investment/ GDP in the G7

Answer 66

Britain