Macroeconomic Aims
Which macroeconomic aim will be affected when many people lose their jobs?
Low unemployment
What is a budget deficit?
A budget deficit is when government's spending is higher than it's revenue.
Which institution usually sets interest rates in a country?
the central bank
What does inflation means?
Price overall go up
What is a progressive tax?
It means higher earners pay a higher percentage
If a country has rising prices of educational cost, which aim will be most affected?
the stability of the price
Why do governments provide benefits or products to vulnerable groups and unemployed?
To promote equity
What is monetary policy?
It covers decisions on the money supply, the rate of the interest and the exchange rate
What does disinflation means?
The rate of inflation slows down
Why is one of the reasons that governments gather taxes?
It can control the demand
A country experiences rapid growth, but also rising inequality. Which aim is being met, and which is being missed?
Economic growth is met; equitable distribution of income is missed.
What is the difference between direct and indirect taxes?
Direct taxes are paid straight to the government by individuals income or wealth, while indirect taxes are based on the price of goods and services and paid by consumers through sellers.
What is the money supply?
The money supply consists of all the money in an economy at any one time
What might be one of the cause of inflation?
too much demands chasing too few goods
Why is one of the reasons that governments spend?
If a country import much more than the exports, what problem will result in?
Governments will have debts
Where the money will be spent when the government want citizens to buy EV cars?
They may offer free license plates
What will the government use when they want to increase the economic growth rate and reduce unemployment?
expansionary monetary policy
Who is responisble for the inflation and deflation?
The central bank
If a country’s currency becomes too strong, which macroeconomic aim might suffer?
Balance of payments stability
What's the aims of governments' macroeconomic?
Economic growth, low unemployment, price stability, balance of payments stability, and redistribution of income
What percentage of the tax should be charged for a person who earns 5 thousand per month and a person who earns 50 thousand per month?
In order to redistribute, government should charge no tax for the person with 5 thousand per month and they should charge 20 percent for the person with 50 thousand per month
What does a central bank raise to reduce inflation?
Interest rate
How to measure inflation or deflation?
First, you need to select a base year. Then, find out how households spend their money. Third, find out price change. Last, construct a weighted price index
True or False: Both fiscal and monetary policy can be used to reduce unemployment.
True