4.1 The role of government

Question 1

Define a trading bloc. [2]

Answer 1

A trading bloc is a free trade area [1] which also promotes the free movement of factors of production between member countries [1].

Question 2

What is the general role of the government? [2]

Answer 2

Improve the general welfare of its people [1] by collecting tax revenue to fund expenditures on essential services [1].

Question 3

What is the local role of the central government? [1]

Answer 3

Collect money to distribute to the local governments [1].

Question 4

What is the local role of the local government? [1]

Answer 4

Use money given by the central government to fund public goods and merit goods [1].

Question 5

What is the national role of the government? [2]

Answer 5

Make decisions to achieve its macroeconomic aims [1] by making new policies such as fiscal, monetary, supply-side and environmental protection policies [1].

Question 6

What is the international role of the government? [2]

Answer 6

Trade with other countries [1] and be part of a trading bloc [1].