4.1 The role of the government |4.0 Government and the macroeconomy Flashcards
Outline the general role of the government.
The general role of the government is to improve the general welfare of its people.
What are the three levels that a government operates at?
A government operates on:
1. a local level
2. a national level
3. an international level
What is the role of the government locally?
The role of the {central}government locally is {to collect taxes, which it uses} to fund local services.
Examples of local services: refuse collection, libraries, schools, hospitals
What is the role of the government at a national level?
The role of the government at a national level is to make decisions about how to achieve its macro-economic aims.
What are the macro-economic aims of the central government?
5 marks
The macro-economic aims of the central government are:
1. Economic growth
2. Stable prices/Low inflation
3. Full employment/Low unemployment
4. Balance of payment stability
5. Redistribution of income and wealth
How does the government achieve macro-economic aims?
The government achieves macro-economic aims by using the appropriate macroeconomic policies.
Give three examples of macroeconomic policies.
Three examples of macroeconomic policies are:
1. Fiscal Policies
2. Monetary Policies
3. Supply-side Policies
Outline the role of the government on an international level.
The role of the government at an international level is to trade with other countries.
What 2 things are put in place by the government of a country to prohibit free-trade with another country?
To prohibit free trade with a country, the government puts in place 1. Tariffs and 2. Quotas
What is the function, in 2 points, of a trading bloc?
A trading block promotes i. free trade and ii. mobility of factors of production between member countries.
