Unit 6 Flashcards
(15 cards)
What is a public good?, give 3 examples
A public good is a commodity or service that is provided without profit to all members of society e.g flood defence, vaccinations, sanitation infrastructure
What is a merit good? give three examples
A merit good is a good that is beneficial for society e.g NHS, schools, parks
What is nationalisation? give an example
Nationalisation is when a private company transfers to a public company e.g the coal industry after WW2
What is privatisation? give an example
Privatisation is the transfer of a government owned (public company) to a private company e.g BT and British Airways under prime minister Margaret Thatcher
What are the two different types of fiscal policy? What do they do?
Expansionary fiscal policy involves cutting taxes and increasing government expenditure in order to increase aggregate demand. Contractionary fiscal policy involves increasing taxes and decreasing government expenditure this causes less disposable income and decreased consumption
What are the two different types of monitory policy? What do they do?
Expansionary monetary policy involves reducing interest rates to increase consumer borrowing and reduce saving. Contractionary monetary policy involves increasing interest rates to reduce consumer borrowing and increase saving
What are supply side policies? What are the different types?
Supply side policies attempt to boost the productivity potential of an economy and increase aggregate supply. The different types are increase growth, selective tax incentives, improving education and training, labour market reforms, competition policy, removing barriers to trade, privatisation.
In supply side policies what effect does increase grow the have?
More jobs + more income + lower inflation
In supply side policies what effect does selective tax incentives have?
Tax breaks to encourage investment
In supply side policies what effect does selective subsidies have?
It supports the development of new technology
In supply side policies what effect does improving education and training have?
It raises skill and productivity
In supply side policies what effect does labour market reforms have?
It restricts trade union power
In supply side policies what effect does competition policy have?
It outlaws anti-competitive behaviour
In supply side policies what effect does removing barriers to trade have?
It increases choice and competition
In supply side policies what effect does privatisation have?
It is the transfer of public sector firms to private sector firms
