Chapter 37 - 39

Question 1

Budget

Answer 1

the government’s spending and revenue plans for the next year.

Question 2

Budget Deficit

Answer 2

the amount by which government spending exceeds government revenue

Question 3

Budget Surplus

Answer 3

the amount by which government revenue exceeds government spending

Question 4

Contractionary Fiscal Policy

Answer 4

fiscal measures designed to dampen demand in the economy

Question 5

Direct Taxes

Answer 5

taxes levied on the income earned by firms and individuals

Question 6

Expansionary Fiscal Policy

Answer 6

fiscal measures designed to stimulate demand in the economy

Question 7

Fiscal Policy

Answer 7

decisions about government spending, taxation and levels of borrowing which affect aggregate demand in the economy.

Question 8

Base Rate

Answer 8

the rate of interest set by the MPC which influences all other rates in the economy

Question 9

Money Supply

Answer 9

the amount of money circulating in the economy

Question 10

Monetary Policy

Answer 10

the use of interest rates and the money supple to control aggregate demand in the economy

Question 11

Rate of Interest

Answer 11

the price of money

Question 12

Supply Side Policies

Answer 12

government measures designed to increase aggregate supply in the economy.