4.2.5

Question 1

What is fiscal policy

Answer 1

it is the manipulation of government spending, taxation and borrowing to achieve macroeconomic objectives

Question 2

what is monetary policy

Answer 2

it is the use of cutting/increasing interest rates to achieve macroeconomic objectives

Question 3

what is supply-side policies

Answer 3

any policy that intends on increasing the productive potential of the economy e.g shift of LRAS to the right

Question 4

what is contractionary fiscal policies

Answer 4

• increasing taxes
• cutting government spending
• reducing borrowing

Question 5

what is expansionary fiscal policies

Answer 5

• decreasing taxes
  -increasing government spending
• borrowing

Question 6

what is contractionary monetary policy

Answer 6

increasing interest rates or reducing QE

Question 7

what is expansionary monetary policy

Answer 7

decreasing interest rates or increasing QE