The current economic growth, as reflected in the GDP, was at a percentage of 0.5 for the year 2011, as measured in the first four months. However, it was said to have decreased at a slight percentage of 0.2 as compared to the other years…
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Economic growth can be defined as a measure of a rise in the Growth Domestic Product (GDP). It is for this reason that we determine whether a country is undergoing inflation or growth and the cost of living of a particular country. To better understand the definition, the term GDP should be made clear. The latter gives a sum total of the production of a given country for the year in question. The total sum comes from adding the government, business and citizen’s expenditure and deducting it from all exports of the country (McCombie and Anthony 43). This will give a general idea of how the market is performing against other international trading markets. The current economic level as explained earlier can be attributed to a number of factors. One of them is that the government has been against the policy of owning property by the public and has also declined the expansion of welfare programs for the public. Nevertheless, the country has an enviable service industry with proper and modern facilities in place. These facilities can be traced to the banking sector, insurance and other business entities that have sky-rocketed the economic growth. Ironically, industries are not in the limelight anymore. As for the forecast economic growth, the International Monetary Fund (IMF) has much to say about the future of the United Kingdom. They report that the world is undergoing a recovery phase, but certain factors will inhibit this progression. High risks with no guaranteed returns continue to challenge investors, which can diminish growth; added that the financial aspect and business opportunities are low. Mr. Daniel Tarling-Hunter, an economist explains why the economy may be falling apart (Thompsons 22). The three reasons that he puts forth are linked to an increase in the rates of unemployment, adding that there is increasing inflation in the region leading to people’s distrust in the government. He adds that this may change in the middle months of 2012 due to hosting of the Olympic Games and an overall decrease in inflation. The economic policies of the UK gear towards a decrease in the manufacturing and production industries. This has caused a stir among the renowned economists of the country. The government has been instrumental in providing policies aimed at enhancing even and proper financial growth all over the country. For instance, it has tried to promote business and its prospects in a view to increase employment in the region. There have been four policies instigated to help economic growth. One of them is the fiscal policy targeting the finance sector which has been out of hand since the public is borrowing large sums of money to pay expensive mortgage thus enhancing debt. The monetary policy will aid in ensuring regulation of prices for greater stability in the trade market while the microeconomic policies will target at drawing the country into a better stand in the world economy by looking into issues of taxation system and business system. Increased government spending refers to the act of the government to influence the economic setup of a country by acquiring more goods and services than it had previously allocated in its national budget. There is an overall rise in the total demand of the country during such periods. It is part of the fiscal policy by the government to control spending in the country. It could have a positive or a slowed impact on the country’s economic prospect. When there is less spending by the government, the rate of GDP goes under since it
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Estimates show that production levels by these multinationals is over one-fourth of the total global output and forms one-third of the overall world trade. Observers are of the view that multinationals or FDIs do have a beneficial impact on the national economic growth, provision of capital, and transfer of technologies, among other issues.
The Determinants of the Level of Interest Rates In the UK And How the Changes in Interest Rate Affect Economic Growth
Monetary policy involves alterations in the interest base rates thus influencing growth rate of aggregate demand, supply of money and ultimately the fluctuation of prices.
Monetary policies lower rates of interest that accompany an increase in money supply hence affecting investment expenditure. A monetary policy would increase the amount of local currency available in the exchange market which will then weaken the rates of exchange with other currencies.
UK has had a long history of being one of the most regulated nations in the world until the storm of liberalization swept over it by the end of the ‘80s. However, since then, when the Thatcher Government came into power, the economy has witnessed a large number of changes which ultimately has made it eligible to be ranked amongst the richest.
Various economic theories differ in their emphasis on key determinants of economic growth. But some of the determinants appear more frequently than others, helping them gain recognition as factors contributing to economic growth. Foremost among these determinants is the governmental institutions that overlook economic activity in a country.
For ease of analysis, managers usually categorize these factors using the PESTLE model. The model thus assists the managers in establishing the performance of a person or business in relation to the prevailing external environment. PESTLE analysis can also be
ure by governments and private enterprises that have eventually meant that the production industry and the countries that depend on production activities like mining, have been affected. The Australian economy may have escaped this turmoil because of its connection with the
The Development Assistance Committee which among other things serves to alleviate poverty, issued guidelines to tackle poverty in the globe in 2001 (Ravallion 2003). The guidelines show that poverty has many interlinked dimensions and causes including: human,
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