The role of the Office for Budget Responsibility
The Office for Budget Responsibility (OBR) is an independent body that checks and publishes forecasts for the UK economy and public finances. It holds the government to account by assessing whether fiscal plans are realistic.
Real World
In March 2023, the OBR revised its UK growth forecast downward after assessing the Chancellor's Spring Budget, publicly highlighting that borrowing would be higher than the government had suggested — constraining political spin on fiscal plans.
Exam Focus
When evaluating fiscal policy credibility, reference the OBR's independence as a mechanism that reduces government incentive to manipulate forecasts.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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