3.5 Fiscal policy

Question 1

Fiscal policy defintion

Answer 1

A policy that uses government revenue and taxation to effect the economy as a whole

Question 2

Economic growth

Answer 2

Budget - deficit 
Government spending - increased
Taxation - reduced 
Effect - Rise in economic growth
and employment

Question 3

Low unemployment

Answer 3

Budget - deficit 
Government spending - increased
Taxation - reduced 
Effect - Rise in economic growth
and employment

Question 4

Price stability

Answer 4

Budget - surplus
Government spending - decreased
Taxation - increased
Effect - Fall in economic growth, unemployment, inflation falls

Question 5

Balance of payments

Answer 5

Budget - surplus
Government spending - decreased
Taxation - increased
Effect - Fall in economic growth, fall in imports