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
Inflation means what?
Price overall go up
What is a progressive tax?
It means higher earners pay a higher percentage
If a country has rising prices, which aim will be most effected?
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
Deflation means what?
Prices overall go 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
Disinflation means what?
The rate of inflation slows down
Why is one of the reasons that governments spend?
If a country import much more than the exports, which macroeconomic aim is not being met?
Balance of payments stability
The government builds 10 new hospitals. Is this expansionary or contractionary?
Expansionary
What will the government use when they want ti increase the economic growth rate and reduce unemployment?
expansionary monetary policy
What might be one of the cause of inflation?
too much demands chasing too few goods
If a country’s currency becomes too strong, which macroeconomic aim might suffer?
Balance of payments stability
What might be the goal for the countries' economic?
Economic growth and price stability
Taxes are an example of what type of policy tool?
Fiscal policy
What does a central bank raise to reduce inflation?
Interest rate
What is one of the negative effects that could be brought from the deflation?
It could lead to a higher rate of unemployment
True or False: Both fiscal and monetary policy can be used to reduce unemployment.
True