Individual Written Exam - Macroeconomics Effects of Covid-19 Lockdown on UK Economy and Achieving Sustainable Economic Growth

Individual Written
Exam

Table of Contents
SECTION A ....................................................................................................................................1
Section B .........................................................................................................................................3
Discuss and explain the macroeconomics effects “covid- 19 lockdown has had on the UK
economy .....................................................................................................................................3
Explain how an economy can achieve sustainable economic growth and analyse the different
methods of measuring economic growth? ..................................................................................4
REFERENCES................................................................................................................................6

SECTION A
1) Monetary policy committee: This committee consists nine members such as governor,
deputy governors for financial stability, banking, monetary policy, four external members and
one chief economist. They all are appointed directly through chancellor. The MPC is based on
the development of the fiscal policy and other features of economic policies of the government
and on the other hand the chancellor is fully updated about monetary policy. Each member of
this committee has full knowledge and expertise in this area of monetary policies and economies.
(Oberholzer, B., 2020)
Impact on inflation: The monetary policy committee is accountable for setting the interest rate
of benchmark in the nation. It influence that how much value or costs are arising that is called
inflation. It is set fort the purpose to attain the target of government for maintain the inflation rate
at 2%. the less and stable inflation is found best for the economy of the UK. It is known as the
main motive of monetary policy. The central bank increase the interest rate of short term that rise
the inflation. The rule of the policies closes the circle.
2) Fiscal Policy: The objective of the treasury for fiscal policy is to assure the public finance
sustainability, value for monetary term for the taxpayer, economic growth and the strong, sustain
balance sheets. (Pullen, J., 2021)
Effectiveness of the fiscal policy: It may be effective in attaining higher growth of the economy
as spending of government, if it is utilized as a tool then it can directly enhance aggregate
demand. It basically control or manage the inflation and stability of the price.
 It helps in mobilising the considerable amount of the factors for investing their number of
projections.
 It assists in furnishing stimulus to upgrade the rate of savings.
 It provides the sufficient incentives to the private field to spread or expand their
activities.
 It's main purpose is to decline the balance of payments. It has been reduced the deficit of
the budget, unemployment and maximize the consumption of the domestic.
 It basically takes time to be executed and can provide rise to conflicts between their
objectives.
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