Ch 31 & 33- Role of Govt. & Economic Policies Flashcards
What is fiscal policy?
Controls level of taxation and spending
What is monetary policy?
Controls supply of money in the country.
e.g. higher interest rates to control borrowing
What is industrial policy?
Promotes the growth of the three sectors
( primary, secondary and tertiary)
What is direct intervention policy?
Looks at government setting up semi-state businesses ( not supplied by the private sector) eg fáilte Ireland, electric Ireland
What is the financial cost?
The item they buy
What is the opportunity cost?
The item they do without
Who usually bears the cost of a policy?
Citizens
->increase taxes
->cutbacks in salary and public services
What is the cost-benefit analysis?
Weighs all the costs against the benefits
What is the direct benefit of economic policy?
Citizens will have more disposable income if there is a cut in income tax
What is an indirect benefit of economic policy?
Businesses get more sales and profit
What are the economic challenges?
-Economy is dynamic- policy changes to reflect this
-Priorities and policies change- eg. Covid
-Confliction goals- sometimes not possible to improve things without negative impact on others.
-Ireland is a small, open economy- external factors influence Irelands economic growth. eg Brexit
What are different govt. policies
FISCAL
MONETARY
INDUSTRIAL
DIRECT INTERVENTION
What is a policy?
Proposed actions and principles for an organisation to follow
What is a government economic policy?
All the ways in which the government tries to have an impact on the economy
What is the main aim of a government economic policy?
To create a stable economic climate that promotes:
-Full employment
-Low inflation
-Increased economic growth
-Social and regional development
