3.2.1.1 government objectives

Question 1

what are the 4 main government objectives

Answer 1

price stability
economic growth
stable balance of payments
minimising unemployment

Question 2

what are some other minor objectives

Answer 2

balancing the budget
equal distribution of income
better living standards

Question 3

what is a recession

Answer 3

a decline in economic growth, the fall in level of real national input

Question 4

what is the defintion for unemploment

Answer 4

the number of people who are willing to work but are not currently employed or unable to find a job

Question 5

what is a stable balance of payments

Answer 5

where the government try to make exports=imports. inflows should equal outflows. it measures the amount of goods and services sold vs bought from abroad

Question 6

what is a trade off

Answer 6

where one objective cant be met without affecting the progress of another objective, the government must choose between objectives as not all can be achiever at the same time

Question 7

what is the definition for unemployment

Answer 7

the number of people who are willing to work but are not currently employed or unable to find a job

Question 8

what are some examples of trade offs/ objective conflicts

Answer 8

economic growth vs price stability
price stability vs low unemployment
economic growth vs stable balance of payments

Question 9

what % do the government try to aim for inflation to be

Answer 9

2%

Question 10

why is there a trade off between price stability and unemployment

Answer 10

because as more people are employed, more people will have disposable income, meaning businesses are more likely to increase product prices

Question 11

why is there a trade off between economic growth and a stable balance of payments

Answer 11

as peoples income goes up, they are more likely to import more goods from other countries, this will increase the amount of money leaving the uk economy

Question 12

what is balancing the budget

Answer 12

where the government would like the value of expenditure in the uk to be the same as taxation

Question 13

how do you measure economic growth

Answer 13

gdp, national income, calculating the value of all goods and services produced in one year

Question 14

what is GDP

Answer 14

the total value of all outputs produced in an economy

Question 15

how do you measure unemployment

Answer 15

the claimant count
labour force survey

Question 16

what is the claimant count

Answer 16

the number of people who claim benefits from the government due to being unemployed

Question 17

what are the disadvantages and advantages of using the claimant count

Answer 17

-not all unemployd people claim it
-excludes people who are unable to work but are looking for a job
-data is east to obtain
-is updated regularly

Question 18

what is the labour force survey

Answer 18

a survey using a sample of the population asking people whether they are seeking work

Question 19

what are the ad/disadvantages of the labour force survey

Answer 19

-more accurate than the claimant count
-expensive and time consuming to collect the data
-sample may be unrepresentative of the whole population

Question 20

what does a high rate of unemployment suggest

Answer 20

it suggests that the economy is doing poorly and that there is unused labour (factor of production) within the economy

Question 21

how do you define inflation

Answer 21

a general increase in the price of goods and the fall in the purchasing of money

Question 22

what does disinflation mean

Answer 22

it is inflation but at a slower rate, for example if inflation decreases to 7% from 5% there is still inflation but at a slower rate.

Question 23

how do you measure inflation

Answer 23

the cpi and rpi

Question 24

what is the basket of goods

Answer 24

a basket of 700 goods which are most commonly bought and used.

Question 25

what is it called when money inflow is higher than money outflow

Answer 25

a budget surplus

Question 26

does the uk usually have a budget deficit or suplus?

Answer 26

a budget deficit as we import alot more than we export