All definitions for the Summative 15 mark

Question 1

Define Fiscal Policy

Answer 1

Refers to manipulations by the government of its own expenditures and taxes to influence the level of aggregate demand.

Question 2

Define monetary policy

Answer 2

Refers to policy carried out by the central bank, aiming to change interest rates in order to influence aggregate demand.

Question 3

Define progressive tax

Answer 3

Progressive tax refers to a tax rate in which the fraction of income paid as taxes increases as income increases.

Question 4

Define Market-Based Supply-Side Policy

Answer 4

Refers to policies that focus on allowing markets to operate more freely with minimal government intervention.

Question 5

Define Interventionist Supply-Side Policy

Answer 5

Interventionist Supply-Side Policy: Refers to any policy based on government intervention in the market intended to affect the supply-side of the economy.