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UK economy micro economics

1. With reference to the UK economy for the period of 1st January 2011 to 30th September 2012, discuss whether the ‘double dip’ recession, in your view, is over or not. Ensure that you critically

discuss both sides of the debate and limit your answers from the perspective of economics.

2. a) What are the principal categories of unemployment. (10%)

b) In the UK unemployment rate rose above its long-term average to
exceed 6% in the period after October 2008. Giving reasons, discuss
whether you think unemployment rates of this magnitude are
important or not. (30%)
c) Critically review what you feel about this long-term unemployment
has done to the economy and how has it impacted on the society. (30%)

d) In your view, do you think reducing unemployment should be a
priority of the UK government and what types of policies or
incentives can the UK government introduce to reduce
unemployment? (30%)

3. a) Why is the sub-prime mortgage-led financial crisis being viewed (50%)
as the worst financial crisis since the Great Depression?

b) How has it impacted on the global economy so far? (50%)

4. a) In an economics context, explain the definitions of inflation, (10%)
deflation and stagflation.

b) In what circumstances will they occur, and if they occur, (45%)
what will the likely effects be on the economic environment?

c) What policies should a government implement to maintain (45%)
economic stability in response to these respective economic


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