Macro

Question 1

What did China do to interest rates?

Answer 1

Lowered them following disappointing economic performance in 2024

Question 2

What are interest rates in Japan?

Answer 2

0.25% to promote consumption

Question 3

Give some examples of countries with very high interest rates

Answer 3

Turkey (over 40% through 2023/24)
Brazil (over 12% in 2024)
Argentina (over 100% in 2023)
USA
UK (5.25% in 2023/24)

Question 4

Give some examples of economies with high consumer confidence

Answer 4

India
Oil exporting gulf nations such as UAE + Qatar
Indonesia

Question 5

Give some examples of economies with low consumer confidence

Answer 5

Eurozone
UK
China

Question 6

What is the UK’s national debt?

Answer 6

95.9% of GDP

Question 7

Which economies have high real disposable incomes?

Answer 7

India
indonesia

Question 8

Which economies have low real disposable incomes?

Answer 8

Turkey
Argentina
Venezuela
Eurozone

Question 9

What is USA government debt as a % of GDP?

Answer 9

123%

Question 10

Uk inflation rate (CPI)

Answer 10

2.6%. Peaked at 11.1% in October 2022. Inflation no longer main macroeconomics focus

Question 11

UK GDP/capita

Answer 11

£36,000

Question 12

Average annual wage growth

Answer 12

5.9% - positive wage growth in real terms, keeping inflation high

Question 13

UK NRU

Answer 13

3.5%

Question 14

Current UK unemployment rate

Answer 14

4.4% - above NRU, suggesting that cyclical unemployment is occurring

Question 15

Interest rates

Answer 15

4.25% now down from a very recent cut of 4.5% a peak of 5.25%. Should Governments reduce it further to promote AD and international competitiveness, since inflation does not seem to be the major focus anymore

Question 16

How is our economy split up into different sectors?

Answer 16

79% services, 14% manufacturing, 6% construction, 1% agriculture (services dominated, not diverse)

Question 17

What is our gini coefficient?

Answer 17

0.357 - increased over past few year due to reduced government spending on welfare benefits, increased taxes, reduced spending on healthcare + infrastructure in real terms

Question 18

Youth unemployment rate UK?

Answer 18

13.3% - increased by about 2% in the last year

Question 19

Employment rate UK

Answer 19

75.1% - Lower than the government target of 80%, suggesting high economic inactivity

Question 20

What is the cause of high economic inactivity in the UK?

Answer 20

Disease, illness, and mental health issues

Question 21

Inflation expectations

Answer 21

3.9% - drives wage bargaining power

Question 22

UK trade deficit

Answer 22

2.6% down from last 10-year average of 4% due to reduced AD

Question 23

Worker productivity UK

Answer 23

Very poor

Question 24

productivity and investment UK

Answer 24

Very weak since cost of living crisis

Question 25

2024/2025 annual growth rate

Answer 25

1.1% - very low

Question 26

Forecast growth rate

Answer 26

Bank of England forecast 0.75% - very poor for such a large and developed economy like the UK

Question 27

Total GDP of UK

Answer 27

£2.851 trillion. UK makes up approx 25% of that GDP alone

Question 28

UK output gap for 2024/25

Answer 28

-0.6% deflationary/negative output gap

Question 29

What are some demand-side reasons for the UK's poor growth right now?

Answer 29

Low Government spending Weak consumer and business confidence High interest rates High levels of taxation Trump's tarriffs and global trade war

Question 30

What are some Supply-side reasons for the UK's poor growth right now?

Answer 30

Short run: High energy prices, High food prices Long run: Very poor productivity, very weak investment since Brexit, poorly performing public services, aging infrastructure

Question 31

What is the potential growth rate for an economy?

Answer 31

The maximum growth an economy can experience without it being inflationary

Question 32

What is the UK's potential growth rate?

Answer 32

Around 1%. Very poor considering it was about 2.5% before financial crisis (healthy) and about 1.5% (not great) between financial crisis and covid. An economy as developed as the UK should have a much better potential growth rate

Question 33

What's wrong with recent unemployment figures

Answer 33

ONS have massively struggled to get people to take part in the survey, resulting in a small survey size of just 10000-15000 instead of the usual 100,000. Small sample size - unrepresentative

Question 34

Economic inactivity rate

Answer 34

21.4% higher than it was before covid - driven by illness, mental health, anxiety etc.

Question 35

Core inflation rate (CPI without price volatile items)

Answer 35

3.4%

Question 36

Producer price inflation

Answer 36

0.3% - very low. It is a future indicator of inflation

Question 37

UK minimum wage

Answer 37

£12.21 driven up as of April 2025 - one of the highest in the world. About 66% of median earnings

Question 38

Pound exchange rate

Answer 38

Very weak to the dollar and the euro. Was much higher before Brexit

Question 39

Forecast budget deficit in UK for 2024/25

Answer 39

4.8% of GDP = £137bn Increased due to covid. Was 15% in 2021/22

Question 40

Income tax has risen in 2 ways. What are they?

Answer 40

1. 45% tax bracket reduced form £150,000 to £125,000 2. Tax brackets frozen till 2028 - forecast to earn the government an extra $45bn/year by 2028 through fiscal drag

Question 41

Corporation tax

Answer 41

25%

Question 42

VAT

Answer 42

20%

Question 43

Average lending rate

Answer 43

4.75%

Question 44

Banks willingness to lend

Answer 44

Good

Question 45

Savings ratio

Answer 45

12% increased dramatically due to lower consumer confidence

Question 46

Quantitative easing during covid

Answer 46

£450bn pumped into UK economy during COVID-19 - no wonder we saw inflation skyrocket after covid

Question 47

How did petrol prices change during 2022 due to Russia Ukraine

Answer 47

Went up from 1.46 pounds per liter in January 2022 to 1.94 pounds per liter in July 2022

Question 48

How did average household utility bills change from 2021 to 2023

Answer 48

went from 1309 pounds in 2021 to 2621 pounds in 2023 due to energy prices because of Russia Ukraine War

Question 49

How have some basic grocery prices changed due to Russia-Ukrain war?

Answer 49

Bread up 220% Eggs up 29% Milk up 39% contributed to cost of living crisis

Question 50

Why did grocery prices rise in UK

Answer 50

Russia and Ukrain are large exporters of wheat and grain, so increases in prices of wheat and grain lead to increased costs for farmers, increasing costs of groceries