Macroeconomics THEME 2

Why did Birmingham’s economy suffer during covid 19?

Large proportion of the employment is in the retail sector

What happens to supply as price increases

The supply increases as more money can be made by firms

What happens to demand as price decreases

Demand increases as more people can afford the service

State 3 Money leakage methods

1. Savings

2. Taxation

3. Imports - Buying internationally and not nationally

State 3 Money injection methods

1. Exports - Money coming in

2. Investments

3. Government spending - Money coming back in

How often is GDP measured

GDP is measured QUARTERLY (Every 3 months)

What are the 2 best ways to reduce need for benefits

Investing in healthcare (people get better faster and return to work)

Investing in education (People gain better qualifications which allows them to access higher paying jobs)

What 4 main things do we need for economic growth

1. Social infrastructure (Housing)

2. Energy infrastructure

3. Transport Infrastructure

4. Broadband Infrastructure

Can economic growth accurately be predicted

No because unexpected events such as COVID - 19 happen

Why is some degree of inflation good?

Shows there is a demand which suggests that the economy is doing well and people have money to spend

High inflation downsides

Consumers worse off

Larger proportion of disposable income gone

Social + political discontent

Businesses lose confidence

Low inflation benefits

Should encourage investment and promote international competitiveness