The monday night economics pub quiz

After a brief spell on the sidelines the monday night economics pub quiz is back in its fourth installment. prepare to rack your brains to the limit!

1) Which English cricket ground recently got renamed as the Ageas bowl in a sponsorship deal with the insurance company?
a) Trent bridge                    b) Rose bowl                     c) New road

2) Who announcd that they had recorded the biggest profits of any Western bank in 2011?
a) Barcalays                        b) HSBC                            c) Lloyds

3) Vodafones chief executive recently slammed phone regulators for saying they were slowing the development of 4g by forcing down prices. But what is his name?
a) Richard Branson             b) Majorie Scardino          c) Vittorio Colao

4) How much did the UK's GDP fall by in the last three months of 2011?
a) 0.2%                                b) 0.4%                              c) 3.6%

5)  In an effort to cut down on organised crime the US government has freezed the financial assets of two groups. The yamaguchi-guma yazuka and...
a) Brothers circle                 b) Mafia                            c) Triads

Tough? Or are you a bonefied economics buff? Lets find out the answers are below...

Answers: 1-b, 2-b, 3-c, 4-a, 5-a

And back we go...

Which way will we go?

Last week the UK economy was officially announced to have shrunk by 0.2% in the last three months of 2011. The announcement was a major boost to the economy which had been hoping for an upturn after the preeciding quarter had yeilded a 0.6% growth.

The fall comes amid speculations that the UK’s economy is set for another year of fluctiations a notion suported by Sir Mervyn King the governor of the Bank of England who warned the economy is likely ‘to zig-zag’.

The main contribution to the fall was the drop in business investment on capital goods causing a fall in the UK’s aggregate demand and therefore economic growth. However, on a more positive note consumer expenditure increased by 0.5% indicating an increase in consumer confidence in the market and hopefully an upturn in the future of the high-street.

Despite, this whatever way you look at these figures, this is worrying times for the UK economy. Another quarter of negative growth and another recession will be on the cards leading to the ‘double dip’ many feared at the end of 2010. Whilst, i personally don’t think we will go into another recession in three months time this is certainly a setback for the UK’s economic recovery and will only further add to the coalition governments worries.

How could the government 'jumpstart' the economy?

What can he do?

After the recent announcement that in the last quarter the UK's economy receded by 0.2%, the distinct possibility of another recession is looming. Many have been calling for the government to intervene into the economy. Bu, what could they do and would it work?

One such way in which the government could intervene is through the process of quantitative easing. (I.E printing money) This wold allow the Bank of England to increase the value of government assets whilst maintaining the low 0.5% interest rate. However, quantitative easing may also lead disillusioned; banks, investors and businesses to simply sit on the money and save it for when there is an upturn in the markets fortunes.

A widely spoken about option recently has been to cut people taxes in the form of income tax cuts. This would enable the poorer section of the economy to have more money to spend and therefore provide an injection of funds into the economy. What income tax cuts do rely on however, is the 'poor' spending this extra income rather than paying of depts or saving it. This therefore is a major flaw of this form of government stimulated economic growth.

My final but probably least likely way in which the government can kick start the economy is to 'stoke inflation'. This involves giving people to hoard cash something even greater to fear by hiking up inflation. By rising prices people may be encouraged to do something more productive with their money like spending it. The flaw? Well although hypothetically stoking inflation is all well and good it is highly unlikely that it can actually be achieved and even less probable in the time period that the government so likely desires.

Although, all forms of government intervention have their benefits, most such as toking inflation are implausible and not feasible under current economic conditions. This means that feasibly to improve the UK's economy the government needs to: Inject money into the economy

                                 Improve the confidence of both the consumers and producers so that more money is spent.