1- Major macro issues Flashcards
1
Q
Macroeconomic instruments
A
- Bank rate (interest rate)
- Gov spending
- Tax rates
- Legal controls and restrictions
2
Q
Macroeconomic targets
A
- Economic growth
- Unemployment
- Income distribution
- Inflation
- Balance of payments
3
Q
Accounts in balance of payments
A
- Current account
- Capital account
4
Q
Value of the current account
A
0
current account usually in deficit and capital account in surplus
5
Q
What’s in current account?
A
Trade balance
- Debit
- Imports
- Transfers (aid to overseas)
- Income (factor income- wages, rent)
- Credit
- Exports
- Transfers
6
Q
What’s in the capital account?
A
- FDI
7
Q
What does having a current account deficit and capital account surplus?
A
Country is dependent on overseas
