Macroeconomic Aims
What is NOT a macroeconomic aim of the government?
A. Economic GrowthB. Balanced Salary for workers
C. Low unemployment
D.Price Stability
B. Balanced Salary for workers💸
What is a surplus?
Taxes are more than the spending, so there is extra money left over.
What is the central bank responsible for that a commercial bank isn’t capable of doing?
Printing money and arranging how much money is in the economy.
Is inflation better or deflation better for a small country?
Both are beneficial in small percentages, when it comes to big swings, neither of them are beneficial.
How is disinflation different from deflation?
Disinflation still is part of inflation, but the rates are reducing.
What does short-run growth in the aim Economic Growth mean?
Making more goods and services each year🔧
What does an indirect tax mean?
Taxes on the money you spent.
What is the narrow definition of money supply?
How can you solve the negatives of inflation? (Lower purchasing, makes planning hard…)
Lower tax rates and reduce money in the banks
(Answers may vary)
Imagine you are part of a company, how can stable prices help family and firms in the future?
Can plan for future budgets/spending
How does the government move money from the richer people to the poorer people? (Two different ways)
Using taxes and benefits
Why does the rich need to pay more taxes?
Is there a possible way to share wealth without taxing?
Share wealth with the poorer people
(Answers may vary) —ex: Yes, only lowering the tax rates in rural areas (setting different tax rates for different parts of the country)
Which is not one of the key tools used for the monetary policy?
A. Interest rates
B.Quantitative (creating new money)
C. Not encourage people to lend or borrow
C⛓️💥
Economic Growth (Produce more goods and services)
If you are part of a government, what other aims will you want to set in order to achieve a successful economy for the country?
Variety of jobs
Protecting Habitats…no climate change..(Answers may vary)
Why does the aim “Retribution of income” matters? What can it achieve for the poorer people?
It can reduce poverty gaps and help everyone receive basic services.
Which effect is similar to the multiplier effect?
(Multiplier effect: using taxes for schools and roads so the citizens can spend again — leading to more taxes paid)
The butterfly effect
Buying or selling government bonds.
(Answers vary)
How can we fight bad deflation?
Cut interest rates, encourage people to spend more from putting up more advertisements.
What does the word autonomous mean when describing sth about the central bank?
It means mostly free
What is the best inflation rate for a country?
Around 2% (A small and steadier inflation rate is beneficial for most countries)
How can we help the vulnerable using the taxes?
How can the monetary policy affect household spending?
It can change the price of daily products, and also the tax rates on spending.
In many countries with low literacy rates, how can we encourage them to put up more bank accounts to prevent deflation/inflation affecting their normal lives?
Have more economic classes (mainly free)
(Answers may vary)
How can we measure inflation as a student?
Use price index- PICK A BASE YEAR-and track price changes