Government Macro Policy

Question 1

Fiscal policy

Answer 1

Use of taxiation and or government spending to manage the economy

Question 2

Monetary policy

Answer 2

Use of interest rates and the manipulation of the money supply to manage the economy.

Question 3

Expanisonary policy

Answer 3

Increase aggregate demand and causr the value of real output produced to increase

Question 4

Contractionary policy

Answer 4

Reduce aggregate demand or reduce the size of an increase in aggregate demand

Question 5

Pro cyclinal policy

Answer 5

Macroeconomic policy designed to work in line with the business cycle

Question 6

Counter cyclical policy

Answer 6

Macroeconomic policy designed to work against the business cycle.