Government Finance
A tax paid to the seller which is then collected by the government
Indirect Tax
The target inflation rate for the UK
2%
Use of taxation and spending to influence the economy
Fiscal Policy
What does GDP stand for?
Gross Domestic Product
Powers which remain exclusively with the UK government are known as
Reserved Powers
When government's planned revenue < planned spending
Budget Deficit
The type of inflation caused by too much money chasing too few goods
Demand-Pull inflation
Use of interest rates and money supply to influence the economy
Monetary Policy
The movement of money, goods, and services between households and firms
Circular Flow
The main devolved matter the Scottish government uses to control the economy is through:
Taxation (Bonus points: Income Tax / VAT)
Spending on long-term infrastructure to grow the economy
Capital Spending
Name the four economic aims of the UK government
Low & Stable Inflation
High level of Employment
Sustainable Economic Growth
Balance in Trade over Long Term
Supply-side policies work because increasing supply creates more
competition
nominal value
Scotland has what % of overall UK oil & gas reserves?
≈90%
Direct payments to individuals/firms whereby there is not a direct benefit
Transfer Payments
The type of unemployment which occurs between the transition from one job and into another job
Frictional unemployment
What happens to consumer spending if interest rates rise?
It decreases
Name one leakage from the circular flow of income
Savings / taxation / imports
The term describing Scotland's greater quantity of tax bands when compared with the rest of the UK is known as
Progressive taxation
The term describing the amount of money the government needs in which to meet it's financial obligations.
Public Sector Net Cash Requirement (PSNCR)
The rule of law and stable government assists the government aim of growth through
increasing output
The act of buying back government bonds to increase monetary supply is known as
Quantitative easing
Where MPC = 0.8, calculate the value of the multiplier.
Multiplier = 1 ÷ (1 − MPC)
= 1 ÷ (1 − 0.8)
= 1 ÷ 0.2
= 5
What is the second greatest country on earth?
Scotland