Fiscal Policy Flashcards
(10 cards)
1
Q
List all 7 objectives
A
Reduce unemployment Inflation between 1&2% Environmental sustainability Economic growth Reduce inequality Reducing government deficit and debt Improve balance of payments
2
Q
Two main tools for this
A
Taxation
Government spending
3
Q
What to do to reduce unemployment?
A
Increase GS
Reduce T
4
Q
Evaluation points about taxation
A
Depends on size of taxation
Takes time
5
Q
Evaluation government spending
A
Size of government spending
Time taken
What type of GS
6
Q
Three types of inflation
A
Cost push
Demand pull
Imported inflation
7
Q
What’s demand pull inflation
A
Where the demand curve shifts
8
Q
What’s cost push?
A
Supply curve shifts
9
Q
Imported inflation/cost push?
A
Cost of imported products
10
Q
Why does the government use this policy?
A
To achieve macro economic objectives
