Global Economics F585 how confident are people with this exam?

thank you robofish! are there any good effcts of having discretionary budget deficit?

Reply 183

MCYan

thank you robofish! are there any good effcts of having discretionary budget deficit?

It supposedly leads to short-run economic growth.

Robofish

x

Just a point - the Bank of England's quantitative easing programme does not result in higher levels of debt since it's money that the central bank's created out of thin air.

Reply 184

Bax-man

It supposedly leads to short-run economic growth.

Just a point - the Bank of England's quantitative easing programme does not result in higher levels of debt since it's money that the central bank's created out of thin air.

How short-run? In what ways?

Reply 185

Robofish

Bax-man

It supposedly leads to short-run economic growth.

Just a point - the Bank of England's quantitative easing programme does not result in higher levels of debt since it's money that the central bank's created out of thin air.

well QE is where BoE buy back government bonds from the private sector, so you could say where they get money from so ye

Reply 186

MCYan

How short-run? In what ways?

Short run as in increase aggregate demand. (Are you aware of the distinction between short-run and long-run economic growth?)

It causes an increase in aggregate demand in the same way any fiscal deficit is supposed to.

Reply 187

Consider this question from tutor2u. 'Discuss the extent to which a recession on the supply-side of the economy is crucial in determining the sustainability of a demand-led recovery' Godd I stared at the question for 5 minutes, and had not much ideas apart from demand-led and supply-side points.

Reply 188

Robofish

well QE is where BoE buy back government bonds from the private sector, so you could say where they get money from so ye

The Bank of England gets the money to purchase government and corporate gilts through a few clicks on a computer screen. The problem isn't one of debt, but inflation.

Reply 189

MCYan

Consider this question from tutor2u. 'Discuss the extent to which a recession on the supply-side of the economy is crucial in determining the sustainability of a demand-led recovery' Godd I stared at the question for 5 minutes, and had not much ideas apart from demand-led and supply-side points.

If there is a contraction in the long-run aggregate supply curve, what will an increase in aggregate demand eventually 'hit'?

Reply 190

What are the limitations of Interest rate policy when in recession? Isn't it just montary policy I think..

Reply 191

Amit92

14

I think the 20marker is going to be on the last extract and related to China?

I like how China is aiming to invest in low-carbon technology/renewable energy sources and reduce dependence on fossil fuels.

Reply 192

what is sterling's effective exchange rate index? I think just comparisons with other currencies? Not sure

Reply 193

Hustler-1337

15

Amit92

I think the 20marker is going to be on the last extract and related to China?

I like how China is aiming to invest in low-carbon technology/renewable energy sources and reduce dependence on fossil fuels.

Yeh, I like how china are thinking as well. China are very smart- they see the potential in the renewable energy market. That way, they get growth in an up & coming industry and also increase their green credentials. China are beginning to see the impact pollution i s having on their own economy.

can someone explain Quantitative Easing in baby language please. I don't fully understand it. I know that it, in effect, injects money into the banking system by the BoE buying back governement bonds/gilts. That's all, but dont know what exactly bonds are. If BoE buy bonds, that is money out of the BoE isn't it? This is where i get lost, and would be difficult if i had to explain it in an exam question. :s-smilie:

Please can someone explain step-by-step how it works and what exactly bonds are. Would be appreciated. Thanks. :wink:

Reply 194

Max_Kirby

As far as I'm aware, the government buys back the bonds, givng the banks more money that they are able to lend, effectively 'creating' money in the economy.

As this is very likely to come up, could we have some model 4 mark answers for,

a) explain the roles of the IMF (Unlikely as in mock)
b) explain the roles of the WTO
c) explain the roles of the ECB

I think it would be helpful for everyone if someone could outline the key points of these.

Reply 195