MISK

Question 1

Absolute Advantage

Answer 1

if a country has a capacity to produce goods at a lower cost than another country

Question 2

Comparative advantage

Answer 2

Lower opportunity cost of production than another country

Question 3

OECD

Answer 3

Organisation for economic co-operation and development

38 countries and its main goal is to promote economic policy.

Acts as a forum for countries to share experiences and co-ordinate policy

Its recommendations influence national policies

This is then a trusted source of a global data

Question 4

Short money

Answer 4

money available in the short term

• bills
• commercial loans
• interbank loans

Question 5

US Tarrifs

Answer 5

US has 145% tarrifs on China steel and aluminium 25%

China has relative tariffs of 125%

Question 6

7 forms of irrational behaviour

Answer 6

bounded rationally
bounded self control
altruism
anchoring bias
availability bias
social norms
rules of thumbs

Question 7

Factors of behavioural economic policy

Answer 7

1 choice architecture
2 framing
3 nudges
4 default choice
5 mandated choice
6 restruicted choice

Question 8

Bank capital

Answer 8

money in the bank from its shareholders

Question 9

Cognitive Bias

Answer 9

• mental shortcuts
• how info is processed

Question 10

Irrational behaviour

Answer 10

• doesn’t maximums total utility

Question 11

The Marshall learner condition

Answer 11

decrease in ER
increases trade balance
a depreciation will improve the overall elasticities are greater than one

Ex + Em > 1

Question 12

Multiplier

Answer 12

how AD changes from an increase in injections

1 / 1-(MPC)

Question 13

Coupon on a bond

Answer 13

is the percentage repayment of its total value.

a 5% coupon on 10,000 bond is 500 per year

Yield on a bond- coupon of what its work in respect to market price

Question 14

Yield equation

Answer 14

Current yield= coupon // market price x100

Question 15

How many quarters of economic growth was there before the GFS

Answer 15

63

Question 16

LFS

Answer 16

40,000 households surveyed across the UK

Done by the ONS

Households surveyed for 5 consecutive months

shows how many people were unemployed over that period

Question 17

Funding for lending

Answer 17

monetary policy
cheaper than the BR

Question 18

CPI (How calculated)

Answer 18

Main measure for inflation

basket of 1700 goods updated annually

collects price of goods across outlets and regions

some are then weighted

worked out change in price when put into index

Question 19

CPI equation

Answer 19

Price of items x weight in current year // Price of times x weight in base year

x100 is the CPI

Question 20

RPI

Answer 20

Basket of goods including industry, rent and morgage

PRI collects prices of cheaper end goods

these are then weighted

worked out and indexed which is the RPI

Question 21

Multidimensional poverty index

Answer 21

3 main (with sub dimensions) dimensions: Health, education, living standards

Calculated by identifying poverty, weighting items and calulating inked

MPI= % in poverty X intensity

This is used but he UN

Question 22

Smith economic ideas

Answer 22

Classical economics

invisible hand
self interest drives progress
division of labour
laser faire economics
wealth comes from productivity
international trade

Question 23

Keynes

Answer 23

AD creates more AD
if AD decraeases then the economy decreases and hence stagnates
government intervention to increase spending
Multiplier index
sticky wages

Question 24

Fishes Equation

Answer 24

how inflation imposes the purchasing power of money

used in economic decision, central banking and locals and savings

I (interest rate) = R (real interest rate) + inflation

Question 25

deadweight loss

Answer 25

economic losses from Market failure loss of overfall social welfare

Question 26

Tacit Collusion

Answer 26

firms co-ordintate behvaiour no formal agreement implicit Price leadership is an example or low priced based comp

Question 27

Overt collusion

Answer 27

Illegal Direct agreement between firms explicit agreements market sharing price cartels bid rigging illegal virgin money and David Lyod

Question 28

Price discrimination

Answer 28

changing how much an item costs to a demographic Conditions - monopoly power - limit reselling - perfect info

Question 29

IHDI

Answer 29

Inequality adjusted human development index looking at the three HDI components (Education, Life expectancy and GNI) but how it is distributed Norway has HDI 0.961 and a IHDI of 0.927 Nigeria has a HDI of 0.53 and IHDI of 0.36

Question 30

transfer pricing

Answer 30

Hungary adopted a transfer pricing policy leading to and increase in tax regulation within OCED guidelines Ireland the government reached a 25bn euro budget surplus after removing their low corporate tax rate of 0.005% which apple was effectively paying this led to strained relationships within the EU a Risk to future economies and an over reliance on corp tax

Question 31

Global competitiveness index

Answer 31

published but the WEF ranks how internationally competitive countries are countries are escorted 0-100 (100 is comp) singapore

Question 32

Forward guidance

Answer 32

2013 BOE issued forward guidance they said no increase in IR until UP was below 7% they expected a 7% decrease within 3 years this happened early in 2014 backtacked on this ad raised it far earlier

Question 33

Joint supply

Answer 33

one good results in supply of another good such as beef and leather

Question 34

Gini coefficiente

Answer 34

0-1 income inequality area between the Lorenz curve and the line of perfect equality

Question 35

Financial policy committee

Answer 35

Oversees the UK's financial system macro prudential regulation which oversees the entire economy and spots market bubbles (the microprudentual regulation is done by the prudential regulation authority)

Question 36

Prudential regulation authority

Answer 36

part of the Bank of England responsible for regulation and supervising financial institutions regulates individual firms

Question 37

Says law

Answer 37

supply creates its own demand when goods are produces, incomes are spent on other goods and services in the economy no overproduction in the long run keynes criticised it during the Great Recession