7.5 Government policies to achieve macroeconomic activities

Question 1

Monetary policy

Answer 1

A decision about the level of interest rates and the supply of money in the economy.

Question 2

Fiscal policy

Answer 2

Decisions about government expenditure, tax rates, and government borrowing.

Question 3

Budgets deficit

Answer 3

The value of government spending exceeds revenue from taxation.

Question 4

Budget surplus

Answer 4

The value of taxation revenue exceeds the value of government spending.

Question 5

Supply-side policies

Answer 5

Government measures that aim to improve the competitiveness of markets and the economy.

Question 6

Exchange rate depreciation

Answer 6

A fall in the external value of a currency as measured by its exchange rate against other currencies.

Question 7

Exchange rate appreciation

Answer 7

A rise in the external value of a currency as measured by its exchange rate against other currencies.

Question 8

Common currency

Answer 8

A currency that is used by more than one country.

Question 9

Eurozone

Answer 9

Countries in the European Union that all use the euro.