Fiscal
What is taxation?
This is money the government collects from people and firms to pay for public services
What is the base ratebase rate (or bank ratebank rate)?
The main interest rate set by a country's central bank that influences bank lending.
Supply‑side policies aim to increase ____________
the amount the economy can produce/ total supply / productive potential)
Permits to pollute that can be bought and sold in an open market which is introduced to limit emissions are called
Tradable pollution permits
When government spending is greater than government revenue, the budget is in this state
fiscal deficit
What happens when the central bank lowers interest rates?
borrowing becomes cheaper =>increase in household spending
Give one example of a supply‑side policy that improves worker skills
e.g. education and training
A common short‑run effect of stronger environmental controls on firms
Increased costs of production, which may reduce investment and slow economic growth
Name one example of current expenditure (a day‑to‑day government cost).
e.g. public sector wages (e.g., teachers, police) or payments for medicinespayments for medicines
What is another tool of monetary policy besides changing interest rates?
money supply
How do infrastructure projects act as a supply‑side policy? Give one short effect on firms or workers.
Better transport and broadband lower costs / lets firms and workers be more productive, increasing output / less time (money) spent on commuting
Protecting the environment via government controls can create a trade‑off with macroeconomic objectives. Give example
economic growth
Explain briefly how an expansionary fiscal policy (like increasing government spending) can reduce unemployment.
e.g. Government spending raises demand for goods and services → firms need more workers → unemployment falls
What could stop people from spending even when borrowing is cheap?
low consumer confidence
Explain one possible negative consequence of supply‑side policies.
environmental damage (negative externalities) / take many years to have full effect
Explain how government controls can both increase unemployment in some industries and create jobs in others (one or two sentences)
Controls like tighter pollution rules can make some firms reduce output and lay off workers (higher unemployment in those sectors), but they also create demand for green technologies and services, producing jobs in new 'green' industries