|
Description
|
Term
|
|
The nine member (four being appointed by the Chancellor) body of the Bank of England which meets eight times a year to act on its responsibility over the conduct of monetary policy
|
Monetary Policy Committee
|
|
Those the cutting of which could actually increase unemployment as they would not increase the jobs available if unemployment is cyclical and thus would cause the unemployed to consume less, reducing aggregate demand, and causing more unemployment
|
Unemployment Benefits
|
|
Banks that operate in both retail and wholesale markets, the formation of which was much facilitated by deregulation and internet banking having reduced the need for branch networks
|
Universal Banks
|
|
That which caused by a move from shares (dividends on which can be suspended) to bonds, a low capital adequacy ratio, and low liquidity due to excessive securitisation having caused asymmetric information, over-speculation (bubbles), moral hazard, and externalities such as a decrease in confidence in the banking system once said event first begun
|
Financial Crisis
|
|
That model which assumes that there is long-term equilibrium, i.e. withdrawals (W) (i.e. savings (S) + taxation (T) + imports (M)) equal injections (J) (i.e. investment () + government expenditure (G) + exports (X))
|
Circular Flow of Income Model
|
|
A situation in which there is a sufficient and efficient flow of liquidity in the economy
|
Financial Stability
|
|
That economic model criticised for not taking into account a lack of job vacancies, occupational immobility, negative externalities caused by rapid urbanisation, or a lack of reinvestment (repatriation of profits, etc.) while also encouraging the neglect of the rural sector by governments, causing stagnating productivity and increasing rural-urban inequality
|
Lewis Two-Sector Model
|
|
That which countries may try and improve so as to encourage economic growth, by investing in education and training allowing for the production of higher value-added output, as well as in healthcare, together assuming wages increase, helping to break the poverty cycle
|
Human Capital
|
|
That type of tax the disadvantages of which are that they may disincentivise work and investment if the marginal rate of tax is too great, may reduce tax revenue if set too high on the Lagger Curve, and require a relatively high literacy rate making them less suited to LDCs
|
Direct Taxes
|
|
That which less developed countries may experience a shortage of due to an over-reliance on cheap primary product exports, a lack of confidence in the country's product quality, and trade barriers or subsidies in developed countries such as of US steel, making LDC exports uncompetitive
|
Foreign Exchange
|
|
When government spending exceeds government revenue in a given time period, raising aggregate demand and reducing any negative output gap, being either cyclical or structural
|
Fiscal Deficit
|
|
A theory that suggests that people desire to hold money as an asset
|
Liquidity Preference
|
|
A market oriented strategy for development where policies such as tariffs are employed to increase domestic production of previously imported goods, thereby protecting infant industries and saving foreign exchange for investment
|
Import Substitution
|
|
Countries that are building up their industrial base and moving away from primary production including newly industrialised countries (NICs) like Thailand, emerging economies like India, middle-income countries like Peru, and some very low-income countries in Asia and Sub-Saharan Africa
|
Developing Countries
|
|
Those schemes that are criticised for having limited coverage, being excessively bureaucratic, and for artificially supporting sunset industries, slowing down a move to markets with better long-term prospects
|
Fair Trade Schemes
|
|
Where a storage of capital results in low per capita incomes, causing low savings, and thus keeping investment low, which then results back in a shortage of capital
|
Low-Level Equilibrium Trap
|
|
A composite indicator of a country's development, varying between 0 (very low) to 1 (very high), based on resources available (GNI per capita (PPP$)), life expectancy at birth, and knowledge (mean and expected years of schooling (depending on age)
|
Human Development Index
|
|
That which often arises in financial markets between borrowers and lenders, the latter often not knowing the former's ability to repay, and between sellers and purchasers as occurred with securitisation of sub-prime mortgages
|
Asymmetric Information
|
|
One of the two traditional banking sectors, taking deposits and making loans to companies and other banks on a large scale, examples being investment banks and other specialist institutions
|
Wholesale Banks
|
|
That the three types of which are progressive (taking a higher percentage from those with higher incomes), proportional (taking the same percentage from all), and regressive (taking a higher percentage from those with lower incomes)
|
Tax
|
