topic 4 key terms

Question 2

bank rate

Answer 2

The rate of interest that the Bank of England pays to commercial banks on their deposits held at the Bank of England

Question 3

Central bank

Answer 3

The National Bank that provides financial and banking services for its country’s Government and banking system as well as implementing the government’s monetary policy and issuing currency. the Bank Of England is the uk central Bank

Question 4

Dividend

Answer 4

A dividend is a payment made by corporation to its shareholders usually in the form of cash or additional shares of stock

Question 5

Monetary policy

Answer 5

The use by the government and its agent the Bank of England of interest rates and other monetary instruments to achieve the government’s policy objectives

Question 6

Quantitative easing

Answer 6

Monetary policy tool used by central banks to stimulate the economy involves the purchase of government bonds or other financial assets by the central bank which increases the money supply and lowers interest rates

Question 7

supply side policies

Answer 7

Government economic policies which aim to make markets more competitive and efficient increase production potential and shift the long run aggregate supply curve to the right.

Question 8

Supply side economics

Answer 8

A branch of free market economics arguing that the government policy should be used to improve the competitiveness and efficiency of markets and through this the performance of the economy

Question 9

Interventionist policies

Answer 9

involve government intervention to overcome market failure. For example, higher government spending on transport, education and communication

Question 10

noninterventionist supply side policys

Answer 10

involve policies to increase competitiveness and free-market efficiency. For example, privatisation, deregulation, lower income tax rates, and reduced power of trade unions