Unit 4: More essay suggestions

Gabs asked about these two essays...I have jotted down some possible areas you should focus on.

To what extent might a high national debt be a cause of concern?

and 

How might the UK's non-membership of the euro explain the trend (decreasing) in inwards investment?

ok, first one is about how being in debt is an issue:

 

focus on -

 

credit rating issues

Bond prices rising

Crowding out

Inefficient investment from govt

Future tax increase to pay for debt

could be inflationary (although in reality at moment it wont be)

 

evaluation

 

need fiscal debt to kick start economy

will automatically pay back in long term (Keynesian view)

If we don't spen what happens to growth & employment

 

second one -

 

being outside Eurozone means possible may be an issue;

 

transaction costs - ie Japanese firms in UK have to pay commission when trading with Eurozone countries

exchange rate uncertainty - leads to lack of investment

 

However:

 

firms more concerned about profiabiltiy

infrastructure

available skilled labour

etc