Macroeconomic objectives and policies

Question 1

What are the government key economic objectives?

Answer 1

Economic growth
Low unemployment
Low/stable inflation
Balance of payments equilibrium on current account
Balance of government budget
Protection of environment
Greater income equality

Question 2

What are demand side policies?

Answer 2

Policies designed to manipulate consumer demand

Question 3

Which policy is aimed at increasing demand?

Answer 3

Expansionary/tight

Question 4

Which policy is aimed at lowering demand?

Answer 4

Deflationary/loose

Question 5

What is monetary policy?

Answer 5

Altering base level interest or the amount of money in the economy

Question 6

What is fiscal policy?

Answer 6

Government spending and taxation

Question 12

What is the government budget?

Answer 12

The governments fiscal (spending/borrowing/taxation) plans are outlined.

Question 13

What is a budget defecit?

Answer 13

Government spends more than they receive

Question 14

What is a budget surplus?

Answer 14

Government receives more money than they spend

Question 15

What are direct taxes?

Answer 15

Taxes paid directly to the government by the individual taxpayer

Question 16

What are indirect taxes?

Answer 16

The person charged is able to pass on the cost to someone else
e.g supplier can pass the tax burden to consumers