1.What is fiscal boost?
2.Why does balance of Payments have to Balance
3.Disadvantages of BOP surplus disquilibrium
4.Difficulties in measuring inflation
5. Difficulties in measuring Unemployment ?
Please Please can someone help my AS exam is very close.......
These are General Answers and information taken from Resources they are not the Exact Answers . you could reference them yourself to understand whether they are the answers you are looking for .
1.What is a Fiscal Boost ?
>> All i know is that when the government spends money .
2.Why does balance of Payments have to Balance ?
>> In economics, the balance of payments, (or BOP) measures the payments that flow between any individual country and all other countries. Any apparent inequality simply leaves one country acquiring assets in the others. That is why , the payments and receipts of each country are, and must be, equal.
There can be no surplus or deficit in a country’s balance of payments as a whole , because every payment will have an offsetting receipt.
3.Disadvantages of BOP surplus disequilibrium ?
>> Warning ! , This info may not be the answer u are looking .. it could be totally different > if you have read the Chapter then you will know for yourself whether this is Correct or not .
" Macro economic instabilty.
A deficit in the balance of payments has these effects
an excess of imports over exports, a dependence on foreign investors, and an overvalued currency. Countries experiencing a payments deficit must make up the difference by exporting gold or Hard Currency reserves, such as the U.S. Dollar, that are accepted currencies for settlement of
international debts.
Since more is imported and less is exported. The real national income will fall which would have ripple effects and damage the economy. There could also be a rise in inflation.
Foreign exchange reserves will be depleted which will hurt the stability and reserve funds. "
4.what are the difficulties in measuring inflation ?
>> Problems in Measuring Inflation :
Family Expenditure survey does not include everybody e.g pensioners are excluded, but pensioners have different spending habits e.g. heating is more important. Young people will benefit more from falling
prices of mobile phones.
Changes in Quality: Computers have many more features than 10 years ago, so it is difficult to compare prices because they are different goods
One off shocks. E.G changes in tax rates or interest rates
People have different inflation rates.
" problems in measuring inflation? Because inflation remains to be one of the most exciting, most important macro-economic phenomena, tackling the life of the communities and of the separate entities and individuals in the most concrete way. We all find it important to know what are the real values that are at our disposal. What are the real values that we produce. What is the real progress of the economy, what is the real growth or decline in our income, what is the real growth or decline in our living standard and well-being. Inflation is one of the obstacles on the way to those real values, important from several viewpoints of our life and our behavior. Therefore, macroeconomic analyses are commonly based on values in real terms, i.e. values adjusted by the increase in the prices with the single objective – to obtain realistic picture of the macro-economic developments. Therefore good investment and business plans of companies, inter alia, do not miss the opportunity to grasp and incorporate the expectations about the future movement of the inflation, as they are aware that it will have an effect on their profit in the future. Therefore, labor unions are interested in inflation when they negotiate wages, therefore each of us is interested in the information about the current and future inflation, i.e. increase in the prices, when we consider what to do with our savings."
Different Types of Inflation Measures:
RPI - old headline inflation rate
RPIX - RPI less mortgage payments this is the underlying rate.
This is used because interest rates are increased to reduce inflation but this higher interest rates increase the cost of mortgage repayments
RPIY = RPIX less taxes ( This is sometimes known as the harmonized rate)
CPI - Consumer Price Index
5. Difficulties in measuring Unemployment ?
>> Measuring Unemployment in the UK
Claimant Count Method.
This is the official govt method of calculating unemployment. It counts the number of people receiving benefits (Job Seekers allowance) This is quite easy to collect.
Problems with Claimant count
The govt has often changed the criteria (30 times since 1979) for those who are eligible for benefits, usually this has been to reduce the claim. This makes it difficult to compare.
The claimant count excludes:
people over 55,
people under 18,
Any one on a govt training schemes,
Married women looking to return to work
Those looking for part time work and not full time work
Some people may claim benefits whilst still working in the “black Market".
>>> I hope that I helped you ... the thing is I dont understand any of these questions since that i just started Economics > I have no Idea whether the answers i got are correct or not . but still I make some research for you .
