Macro: Evaluation & Application

Question 1

What is the productivity gap of the UK compared to G7 countries?

Answer 1

The UK has 16% lower productivity compared to G7 countries.

Question 2

What is a major cause of the UK’s low productivity?

Answer 2

Low R&D investment at 2.9% of GDP, compared to 3.1% in Germany and 3.2% in Japan.

Question 3

What management issue affects UK productivity?

Answer 3

The UK has a higher proportion of low-skilled managers.

Question 4

What is the impact of low-skilled managers in the UK?

Answer 4

It leads to less innovation and poor decision-making due to short-termism.

Question 5

What is the UK’s global rank in infrastructure investment?

Answer 5

The UK ranks 36th globally.

Question 6

What is the UK’s capital investment as a percentage of GDP?

Answer 6

Capital investment in the UK is 18% of GDP, which is low compared to EU counterparts.

Question 7

Which sectors are affected by skill shortages in the UK?

Answer 7

Engineering and digital technology sectors are affected.

Question 8

What is the impact of skill shortages on productivity?

Answer 8

Skill shortages limit productivity in high-value industries.

Question 9

What is the Apprenticeship Levy in the UK?

Answer 9

Firms with payrolls over £3 million must invest 1% in apprenticeships.

Question 10

What does the Skilled Worker Visa Programme (2022) address?

Answer 10

It addresses skill shortages.

Question 11

What is the Full-Expensing Investment Scheme (2023-2026)?

Answer 11

It allows for a 100% tax deduction on new capital investments.

Question 12

What are the R&D subsidies allocated for?

Answer 12

£360 million for pharmaceuticals, zero-carbon aircraft, and automotive tech.

Question 13

What is the purpose of the Tax-Free Childcare scheme?

Answer 13

It encourages women to return to work.

Question 14

What is the Kickstart Scheme?

Answer 14

A £2 billion initiative for 200,000 young people at risk of long-term unemployment.

Question 15

How is the Apprenticeship Levy often misused?

Answer 15

It is often used for manager training rather than for new workers.

Question 16

What is a negative output gap?

Answer 16

It occurs when actual GDP is less than potential GDP.

Question 17

Which regions experience negative output gaps?

Answer 17

Regions include Ukraine, Latin America, Southeast Asia, and West-Central Africa.

Question 18

What is a positive output gap?

Answer 18

It occurs when actual GDP is greater than potential GDP, indicating an overheating economy.

Question 19

Which regions experience positive output gaps?

Answer 19

Regions include Southern Europe and Liberia.

Question 20

What is an example of negative interest rates?

Answer 20

Japan has a negative interest rate of -0.1%.

Question 21

What is the impact of negative interest rates on savers?

Answer 21

Savers lose real value of their savings.

Question 22

What is the real interest rate?

Answer 22

The real rate adjusts for inflation.

Question 23

What is microfinance?

Answer 23

Provision of financial services to the ‘unbankable’.

Question 24

What is an example of microfinance in Bangladesh?

Answer 24

Grameen Bank.

Question 25

How many beneficiaries does microfinance have globally?

Answer 25

200 million beneficiaries globally.

Question 26

What are the products offered by Novo Nordisk?

Answer 26

Ozempic and Wegovy are weight loss drugs.

Question 27

What is the cost range for Ozempic and Wegovy?

Answer 27

The cost ranges from £11,000 to £16,000 per year.

Question 28

What is the market potential for Novo Nordisk in the US?

Answer 28

13% of a potential market of 300 million customers.

Question 29

What was the impact of Novo Nordisk on Denmark?

Answer 29

It saved Denmark from recession, created 21,000 jobs, and contributed 1% of tax revenue.

Question 30

What is a credit crunch?

Answer 30

A sudden reduction in credit availability.

Question 31

What is an example of a credit crunch?

Answer 31

The Global Financial Crisis of 2008.

Question 32

What was the cumulative value of UK Quantitative Easing (QE) in 2020?

Answer 32

The cumulative value was £895 billion.

Question 33

What was the impact of UK QE on bond yields?

Answer 33

It pushed down bond yields, lowering mortgage rates.

Question 34

What is South Korea's economic base characterized by?

Answer 34

A highly diversified industrial base.

Question 35

What was South Korea's GDP growth in 2023?

Answer 35

0.6% in Q4 and 2.2% annually.

Question 36

What characterized Japan's Lost Decade?

Answer 36

Persistent stagnation from 1990 to 2011.

Question 37

What caused Japan's economic stagnation in the 1990s?

Answer 37

A debt crisis and stock market crash.

Question 38

What are examples of micro supply-side policies?

Answer 38

Deregulation, privatization, work visas, and tax-free childcare.

Question 39

What are examples of macro supply-side policies?

Answer 39

Income/corporate tax changes, migration policies, trade agreements, and infrastructure projects.

Question 40

What was the estimated UK spending during COVID?

Answer 40

Estimated at £310-£410 billion.

Question 41

What was the impact of UK COVID spending?

Answer 41

It stimulated aggregate demand through transfer payments and furlough.

Question 42

What is the EU-UK Trade and Cooperation Agreement?

Answer 42

A free trade agreement post-Brexit.

Question 43

What was the UK's trade deficit in 2023?

Answer 43

£31.6 billion.

Question 44

What tariffs were resolved in 2023 between the US and UK?

Answer 44

Tariffs on aerospace products.

Question 45

What is the impact of the RCEP trade agreement?

Answer 45

It eliminates 90% of tariffs among member countries.

Question 46

What is the value of Norway's sovereign wealth fund?

Answer 46

$1.6 trillion.

Question 47

What is the goal of Norway's sovereign wealth fund?

Answer 47

Sustainability for future generations.

Question 48

What was the LIBOR scandal?

Answer 48

A scandal where banks manipulated benchmark rates in 2012.

Question 49

What is an example of stress testing in UK banks?

Answer 49

A scenario where the bank rate rises to 6% and UK GDP falls by 5%.

Question 50

What are some nudges used in Norway for electric vehicles?

Answer 50

70% off toll roads and free parking for EVs.

Question 51

What was the food bank usage in the UK in 2023?

Answer 51

3 million people.

Question 52

What is the CEO pay ratio in the UK?

Answer 52

CEOs earn 118 times more than average workers.