• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Analyse the effects of a rise in the UKs economic output

Extracts from this document...


Analyse the effects of a rise in the UK?s economic output UK economic output rose by 0.8% between July and September. Economic output is the value of the goods and services produced by all sectors of the economy; agriculture, manufacturing, energy, construction, the service sector and government. Businesses will benefit from this as rising GDP may indicate rising incomes and increased spending on goods and services. This will generate more profit for firms and increased opportunities for future investment. This is particularly true in the housing market where construction companies are in high demand and the increase in supply of houses is boosting output and investment in this sector and beyond. ...read more.


Extra government revenue helps to reduce the budget deficit and consequently lead to more sustainable government finances. Higher output raises tax revenue without having to increase tax rates, and some of this extra revenue can also be used to improve public services, such as education and health care. Although incomes are rising, if the cost of living is rising at a faster rate due to inflation, it will have a negative effect on people?s standard of living. This is particularly true for certain parts of the UK. ...read more.


With high growth, demand rises faster than firms can keep pace with supply; faced with supply constraints, firms push up prices. Similarly, if aggregate demand does not increase in line with production, higher output may be accompanied by higher unemployment. If, for example, workers? productivity increases by 5 per cent, firms will be able to produce more output with fewer workers. If real GDP per head rises, the population can enjoy more goods and services. Of course, whether they all do so will be influenced by the distribution of income. Growth enables poverty within a country to be reduced without having to redistribute existing income. Higher output raises tax revenue without having to increase tax rates. Matt W ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Peer reviewed

    Discuss how the government might improve the UK's long term economic growth

    4 star(s)

    The cut in benefits means that people are forced into work, as the incentives for remaining unemployed have been cut. Therefore, the government is spending less tax payers' money on benefits, and whereas previously these people would have been an economic burden, they now become an asset.

  2. Why has GDP growth been so slow in Somalia?

    When 26% of GDP is primary commodity dependent an otherwise ordinary country has a risk of conflict of 23%. By contrast, if it had no primary commodity exports (but was otherwise the same) its risk would fall to only 0.5%.

  1. How to Increase the UK's Productivity?

    Today, size of service sector is about 76% of her GDP compared to manufacturing sector of 22%. Having said so, critics argue that it has an extremely long effect lags. This is because the building of schools and having a targeted number of skilled graduates are not an overnight effort.

  2. Free essay

    does uk housing market warrant government intervention

    of price elasticity of demand mean that, yes, it will still be inelastic. But it will be less inelastic than that of the South East because it is less popular, and housing in the south could be seen as a rival competitor therefore people are not going to want to

  1. Chinese Economic Reform

    The Chinese were as vociferous about issues of sovereignty. Nathan maintained that the Mao-led revolution, which culminated in victory in 1949, had been fueled by "an intense patriotism: ... once China had 'stood up,' no infringement on its sovereignty, no matter how small, should be permitted" (53).

  2. International economic relations

    of money capital, had ridden the most of European countries (maybe except Germany and, in some measure, Britain) into a state of a downfall of production, especially of agricultural one. Gradually there appeares the idea that the wealth consists of goods. In this sense, physiocrats can be considered the pioneers.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work