7- Demand side policies definitions

Question 1

Budget

Answer 1

Where the government lays out their spending and taxation plans.

Question 2

Budget deficit

Answer 2

When the government spends more money than it receives.

Question 3

Budget surplus

Answer 3

When the government receives more than it spends.

Question 4

Direct tax

Answer 4

Taxes paid straight to the government by the individual tax payer.

Question 5

Indirect tax

Answer 5

Tax where the person charged with paying the money to the government is able to pass the costs to someone else.

Question 6

Contractionary policy

Answer 6

Fiscal or monetary policy which is aimed at increasing AD.

Question 7

Expansionary policy

Answer 7

Fiscal or monetary policy which is aimed at increasing AD.

Question 8

Government spending

Answer 8

Spending by the government for the provision of goods and services.

Question 9

Interventionist supply side policies

Answer 9

Policies designed to correct market failure, where the government intervenes in the market.

Question 10

Market based supply side policies

Answer 10

Policies which are designed to remove anything which prevents the market system working efficiently.