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Economics is the study of how society allocates its scare or limited resources to provide for its needs
and wants

Stable economic growth
Full employment
Stable prices
Satisfactory trade balance
Redistribution of income

GDP Gross Domestic Product, the total output produced by the economy, measured in money terms
Income method…

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decrease in interest rates

i loans > i investment/consumption
d saving > i consumption
d mortgage payments > i disposable income > i consumption
i demand for houses > i house prices - + wealth effect > i consumption
i credit cards > i consumption
d hot money > d…

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Legal ages for unemployment
Child benefits
Cut benefits

Capital
Investment in technology
Subsidies or loans
Research and development

Enterprise
Education and training
Small business grants
Tax break
Advice


Inflation sustained increase in the general price level. It measures the annual rate of change in the
general price level of the…

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Problems
Lower AD, lower GDP
Less disposable income
Negative multiplier effect - low ad means fewer workers needed, cycle repeats
Living standards reduce due to lower GDP
Social costs - more crime/ suicide/ divorce/ dysfunctional families/ substance abuse

Trade

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