Why does the UK Government have such low interest rates on its debt?

Like the US the UK is facing low interest rates, despite having a high budget deficit and public debt. Why is this? The UK Government issues its debt in the form of Guilts, currently the interest rate the government has to pay on a year guilt is 0.32%. This is lower even than the base Read more about Why does the UK Government have such low interest rates on its debt?[…]

The importance of confidence to the economy

Keynes talks a lot about confidence and the animal spirits of firms and people when making decisions. So how important is confidence to the economy? Without confidence businesses wouldn’t invest. This can be seen in the present climate, many firms have a lot of spare cash on their balance sheets, which could potentially lead to Read more about The importance of confidence to the economy[…]

Are large or small companies more successful?

This was a previous Interview Question for Oxbridge Economic Applicants. Here is a sample answer I came up with. To start with to answer this question it depends on how we are measuring size and successfulness. If we measure both in terms of profit then obviously a large firm (one which has larger profits) will Read more about Are large or small companies more successful?[…]

Can addiction be rational?

I would define a rational being as someone that aimed to maximise the utility whilst trying to minimise the costs. Addiction is something that people do because, a. they enjoy doing it, and b. there may be¬†psychological¬†or chemical reactions occurring that increase the cost of not consuming the good/service. Therefore I would believe addiction to Read more about Can addiction be rational?[…]

Oxbridge Interview Questions

The Oxbridge Interviews are coming up soon (Mine with Gonville and Caius is on the 5th!) and below are some Economic Interview Questions I have found, I’ll be answering some of them in future posts! Why Economics? Why Cambridge, or more specifically why this College? Are large or small companies more successful? Explain how the Read more about Oxbridge Interview Questions[…]