Economics class: Switch to value stocks to prepare for inflation
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.
Specification:
Economic growth, unemployment, inflation
Click to read the article below and then answer the questions:
Switch to value stocks to prepare for inflation
Distinguish between Gross Domestic Product (GDP) and Gross National Product (GNP)
‘Tax revenues will follow (GDP growth).’ Using a diagram, explain the induced nature of tax revenues
‘Once government debt goes over 77 per cent of GDP every additional percentage point reduces real annual GDP growth by 0.017 points.’ Calculate the potential hit to UK GDP given the UK’s debt-to-GDP ratio is 106 per cent
‘The UK state currently subsidises the wages of the low paid via the universal credit system — in July this year 5.9m people were claiming benefits this way.’ Explain how universal credit acts as a subsidy
Evaluate the extent to which economic agents benefit from rising inflation.
Gavin Clarke, Emmanuel College
Comments