A seasonal introduction to Consumption, Government Spending and Aggregate Demand.

In the New Year, students and teachers will be turning their thoughts to Aggregate Demand and its determinants. Two short BBC news clips consider the impact of two factors, Consumption and Government Spending on Aggregate Demand.

A short seasonal BBC video highlights the impact of the recent weather on Consumer behaviour in terms of delayed spending, with the impact of consumer confidence and changes in VAT on possible levels of Aggregate Demand in early 2011.

The weather has brought in an exogenous shock to the UK economy. The current cold snap has dented the revenues, profits and reputation of the transport sector as the long queues of miserable would be travellers are broadcast across Europe. Students could consider which sectors of the economy have actually seen increases in sales and revenue, they won’t be surprised to read here  that hauliers and on-line retailers have been unable to satisfy demands for their services.

On the other hand another element of Aggregate Demand is Government Spending, and figures released for November 2010 show that State borrowing had risen c.34%. The headline figure about Record UK borrowing could also trigger off a discussion about the differences between current and constant prices.

It might be pertinent to ask pupils where they would expect GDP to be at the end of May 2011. Paul Fisher a member of the The Bank of England’s MPC in an interview  with The Daily Telegraph, infers that the UK economy could contract in 2011, he implies that the risk of deflation has “diminished”, but considers the biggest risks to the UK are now external shocks like a fresh crisis in the sovereign debt markets, a spike in commodity prices or a collapse in US growth,

Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK [23 May 2012]
Unit 2 Macro: Positive and Negative Multiplier Effects [20 May 2012]
Unit 2 Macro: The Importance of Productivity [20 May 2012]
Unit 2 Macro: Human Development Index (HDI) [20 May 2012]
Q&A: What do we need to know about output gaps? [20 May 2012]
Unit 2 Macro: The Output Gap [20 May 2012]
Revision notes on unemployment [20 May 2012]
Unit 2 Macro: Bank Cuts UK growth Forecast for 2012 [16 May 2012]
Unit 2 Macro: Government Spending [11 May 2012]
Unit 2 Macro: Revision Notes on Supply-side Policies [10 May 2012]
Unit 2 Macro: Growth and Development Glossary [5 May 2012]
Unit 2 Macro: Monetary Policy and Inflation Glossary [5 May 2012]
Unit 2 Macro: Trade and Balance of Payments Glossary [5 May 2012]
Unit 2 Macro: Fiscal Policy Glossary [5 May 2012]
Unit 2 Macro: Economic Cycle Glossary [5 May 2012]
Unit 2 Macro: Aggregate Demand Glossary [5 May 2012]
Macro Revision - Key Statistics on the UK Economy [4 May 2012]
Macro Revision: Putting Things in Context [29 Apr 2012]
Unit 2 Macro: Britain back in Recession [29 Apr 2012]
Unit 4 Macro: Managing the Global Commons - Limits to GDP [15 Apr 2012]
Unit 2 Macro: The UK Balance of Payments in 2011 [4 Apr 2012]
Unit 4 Macro: Productivity Improvements in China [3 Apr 2012]
Unit 2 Macro: Revision on Real Economic Data [2 Apr 2012]
Unit 2 Macro: Gross National Happiness in Bhutan [31 Mar 2012]
Posen on slower growth in the UK compared to the USA [30 Mar 2012]
Unit 2 Macro: Revision on Capital Investment [30 Mar 2012]
Global Economy- the 2012 BRICS Summit [28 Mar 2012]
Life in the Slow Lane - UK Growth in 2011 Lags the Euro Area [28 Mar 2012]
George Buckley at the Millfield Economics Society [28 Mar 2012]
Unit 4 Macro: Evaluating 3 Years of Quantitative Easing [27 Mar 2012]
Where does my money go? [20 Mar 2012]
Unit 2 Macro: Policies to Drive Economic Recovery [9 Mar 2012]
Economies hooked on central bank stimulants? [4 Mar 2012]
Unit 2 Macro: The Dash for Gas in Mozambique [17 Feb 2012]
Unit 4 Macro: King on the UK Economy [15 Feb 2012]
Unit 1 Micro: Public Goods [11 Feb 2012]
Martin Wolf on Global Shocks [10 Feb 2012]
Unit 4 Macro: Focus on India - Comparative Advantage [27 Jan 2012]
Unit 2 Macro: Focus on China - Trade and Growth [27 Jan 2012]
Unit 2 Macro: Focus on China - Carbon Emissions and Growth [26 Jan 2012]
Unit 2 Macro: Focus on China - Per Capita Incomes [26 Jan 2012]
Unit 2 Macro: Focus on China - Changing Economic Structure [26 Jan 2012]
Unit 4 Macro: Focus on India - Economic Growth [24 Jan 2012]
Unit 4 Macro: Money, Debt and the New World Order [22 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
Hopes and Fears 2012 [10 Jan 2012]
Unit 2 Macro: The UK Housing Market in 2011 [26 Dec 2011]
Unit 2 Macro: Brazil Overtakes UK in Economic Size [26 Dec 2011]
Ten Things About Tax [23 Nov 2011]
Where is the UK Economy? National Output [22 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
AS and A2 Macro: GDP resources from Planet Money [31 Oct 2011]
How do you spend £691.7bn? [30 Oct 2011]
Unit 2 Macro: Analysing Government Spending Cuts [25 Oct 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
Keynes Prize: The Economics of Cities (2) [13 Oct 2011]
Keynes Prize: The Economics of Cities (1) [12 Oct 2011]
Unit 2 Macro: UK suffers a weak recovery [12 Oct 2011]
Why Is Macroeconomics Such A Mess? [11 Oct 2011]
Unit 2 Macro: Homework Assignment on Consumer Spending [3 Oct 2011]
Unit 2 Macro: Exercise on National income [27 Sep 2011]
Unit 4 Macro: Greek Economy at Default’s Door [25 Sep 2011]
Unit 4 Macro: IMF Flags up Risks of Double Dip [20 Sep 2011]
Study Note - Measuring national income [16 Sep 2011]
Study Note - Value Added and Contributions to a Nation’s GDP [16 Sep 2011]
Study Note - Introduction to GDP [15 Sep 2011]
Unit 2 Macro: Economic Growth and Inequality [14 Sep 2011]
Study Note - What is Macroeconomics? [13 Sep 2011]
UK Macro: Risks of a Double Dip Recession [12 Sep 2011]
Unit 2 Macro: Value Added in Production and GDP [11 Sep 2011]
Unit 4 Macro: GDP per person since the credit crunch [19 Aug 2011]
Unit 1 Micro: High price of petrol drains demand [9 Jul 2011]
A2 Macro: Consumer Spending [30 May 2011]
AS Macro Key Term: Demand Pull Inflation [24 May 2011]
AS Macro Key Term: Deflation [24 May 2011]
AS Macro Key Term: Trend Growth [23 May 2011]
AS Macro Key Term: Economic Recovery [23 May 2011]
AS Macro Key Term: Recession [23 May 2011]
AS Macro: GDP Projections [19 May 2011]
EU Economics: Comparing the UK with Europe [14 May 2011]
UK Economy Update: What Mervyn Said [11 May 2011]
AS Micro: What´s really behind the oil price rise? [10 May 2011]
Interest Rates Held at 0.5% once again [5 May 2011]
Macroeconomics revision - measuring Consumer Confidence [4 May 2011]
AS and A2 Macro Revision: Keynesian Economics [28 Apr 2011]
AS and A2 Macro Revision: The China Effect [26 Apr 2011]
Australia Booming Ahead [21 Apr 2011]
Rise in investment could kick start recovery [18 Apr 2011]
China set to become exporter of inflation [14 Apr 2011]
A2 Macro: Back to Roubini - a Year On! [11 Apr 2011]
AS Micro: Prices for New and Second Hand Cars [9 Apr 2011]
AS Macro Key Term: Double-Dip Recession [8 Apr 2011]
AS Macro Key Term: Jobless Recovery [8 Apr 2011]
AS Macro Key Term: Gross National Income (GNI) [7 Apr 2011]
AS Macro Key Term: Economic Structure [6 Apr 2011]
AS Macro Key Term: Fiscal Austerity [6 Apr 2011]
AS Macro Key Term: Inflationary Pressure [5 Apr 2011]
Focus on Poland [5 Apr 2011]
Tracking the effects of the recession on GDP [5 Apr 2011]
AS Macro Key Term: Expansionary Monetary Policy [4 Apr 2011]

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