4.5.4 - Macroeconomic polices in a global context Flashcards
Use of fiscal policy, monetary policy, exchange rate policy, supply-side policies and direct controls in different countries, with specific reference to the impact of:
* measures to reduce fiscal deficits and national debts
Do an essay on this and blurt out all the strategies you know
Use of fiscal policy, monetary policy, exchange rate policy, supply-side policies and direct controls in different countries, with specific reference to the impact of: o measures to reduce poverty and inequality
Do an essay on this and blurt out all the strategies you know (25 marker)
Use of fiscal policy, monetary policy, exchange rate policy, supply-side policies and direct controls in different countries, with specific reference to the impact of: * measures to increase international competitiveness
Do an essay on this and blurt out all the strategies you know (25
marker)
E.g RULC low in Bangladesh and China, china manged exchange rate against US, UK gov removal of red tape,
Use of fiscal policy, monetary policy, exchange rate policy, supply-side policies and direct controls in different countries, with specific reference to the impact of: changes in interest rates and the supply of money
Do an essay on this and blurt out all the strategies you know (25 marker)
What is transfer pricing
- Transfer pricing allows parent companies to move profits between their Daughter companies, in order to Reduce the corporation tax they have to pay.
- 2016 apple selling to daughter companies, and was forced to pay £13bn in tax
How can the government directly control global companies
Through regulating transfer pricing : Using the **arm’s length principle’
why is it difficult to regulate the behaviour of global companies
*Footloose ( because they can move to countries) w lower regulation and Take advantage of:
Cheapest wages
Lowest corporation tax
Loosest regulation
* govs want to keep global companies happy as they provide employment and tax revenue
* govs in one country cannot tell other countries what their policies should be, and there is often a race to the bottom to incentive global companies
how does inaccurate information affect the ability of the government to design effective policies
some issues are new, and the economy has not faced them before, so there is no data available or there is likely to be a time lafg until any is available
how does uncertainty and risk affect the ability of the government to design effective policies
some policies are longer term, so projections about the future state of the economy are also subject to risk and uncertainty
how does the inability to control external shocks affect the ability of the government to design effective policies
na external shock such as covid can destroy the ability of the gov to design effective long run policies e.g. the uk was projected to be running a budget surplus by 2021 but covid has now meant that national debt is near 100%
What are problems facing policymakers when applying policies?
-Inaccurate information.
-Risks & uncertainties.
-Inability to control external shocks.
Examples of an inaccurate information
This happened in 2014 when the government in Kenya was given inaccurate information about school enrolment leading to missalocation of resources which meant that many areas of Kenya went under defunded
