12

Question 1

Measures to reduce fiscal deficit and national debt

Answer 1

Less government spending, higher taxes
Economic growth -> raises tax revenue
Government bonds
Default in debt

Question 2

Measures to reduce poverty

Answer 2

Income distribution
Sustained growth
Progressive taxes
Improve human capital
Government spending i healthcare and education

Question 3

Measures to change interest rates and supply of money

Answer 3

Monetary policy/ QE

Question 4

Measures to increase international competitiveness

Answer 4

Decrease unit labour costs
Currency devaluation
Lower tax

Question 5

Measures to control TNCs

Answer 5

Regulation of transfer pricing

Question 6

Measures when applying macro policies

Answer 6

Inaccurate policies- lack of perfect knowledge
Risk and uncertainties- consumers react in different ways
Inability to control external shocks