macroeconomic policy 1

Question 1

fiscal policy

Answer 1

gov changing tax levels and gov spending in order to influence ad

Question 2

contractionary fiscal policy

Answer 2

raises taxes and cuts spending. ALSO increasing budget surplus

Question 3

budget surplus

Answer 3

tax>gov spending

value of exports>value of imports

Question 4

budget deficit

Answer 4

gov spending> tax rev

Question 5

expansionary fiscal policy

Answer 5

cuts taxes and increases gov spending

Question 6

problem with ex fiscal pol

Answer 6

NATIONAL DEBT

Question 7

current expenditure

Answer 7

short term spending on day to day running of the country
wages
consumables

Question 8

capital expenditure

Answer 8

long term spending on assets
hospitals
schools
roads

Question 9

transfer payments

Answer 9

redistribution of income for which no good or service is provided in return
benefits

Question 10

progressive tax

Answer 10

increase the proportion of tax based on income

Question 11

regressive tax

Answer 11

the tax falls as income falls

Question 12

proportional tax

Answer 12

everyone gets the same percentage of tax no matter of income

Question 13

budget deficit leads to

Answer 13

national deficit

Question 14

is expansionary good for long or short term?

Answer 14

short-run stimulus

Question 15

inflation?

Answer 15

fiscal policy doesn’t solve it because some of the causes vary for example increasing raw material costs from abroad