Role of government
Industries important for economic development or national champions
strategic industries
Increase in output of economy and productive potential in long run
economic growth
Government revenue is higher than government expenditure
Budget surplus
Policy that cuts the money supply
contractionary monetary policy
That part of economy that is not regulated of taxed is called unregistered
False/informal
A government authority which can admisnister within a limited area of the country
Local government
Total demand for a countries' production at a given price level
aggregate demand
A one-off tax aimed to cut supernormal profits
windfall tax
A factor causing changes in ex rates
inflation, bop disequilibrium,int rates,fdi,speculation
C+I+G+(M-X)=AD
false
A single firm industry because it can produce at lower average cost due to economies of scale
Natural monopoly
Govt. decides to give subsidies to farmers to reduce import of agricultural products. What type of policy is this?
protectionism/import substitution.
The quality of a tax system to change with change in economic activity
Flexibility
Ways to restrict bank lending
Selling government bonds/ increasing reserves with central bank
The lowest level of unemployment possible is known as full employment
true
A group of countries that remove trade restrictions between themselves
trade bloc
An increase in an economy productive capacity
potential economic growth
Fiscal policy that reduce fluctuations in economic activity
automatic stabilisers
Impact on exchange rate when rate of interest becomes higher
value increases
Price stability means the price level does not change ever
False.
An organisation that deals with rules of global trade between member countries
WTO
Those who are working or seeking work
labour force/economically active
This type of tax are regressive
Indirect tax
A way in which contractionary monetary policy may fail
earning from savings.
The rise in prices of goods and services is called inflation rate
false