Corrections

Question 1

Interest rates

Answer 1

Increased interest rates- Lower AD and a fall in house prices
Decreased interest rates- Higher AD and a rise in house prices

Question 2

Why are there decreased loans

Answer 2

Increased earnings

Question 3

What policies can the government use to increase economic growth?

Answer 3

Supply side policies

Question 4

Economic growth

Answer 4

The capacity output (production of goods/services) over time

Question 5

Standard of living

Answer 5

Degree of wealth available to a person

Question 6

Cost of living

Answer 6

Monetary cost of maintaining a particular standard of living.

Question 7

Inflation

Answer 7

The general rise in average prices across an economy in a given period of time

Question 8

Price stability

Answer 8

When average prices are stable or rise at a low and predictable rate.

Question 9

Economic shocks

Answer 9

When there’s a period of significantly increased or decreased economic activity (boom or recession). Usually due to investment or contractionary fiscal policy.

Question 10

Lower corporation tax

Answer 10

Gives firms more of an incentive to expand and invest which leads to increased productivity/efficiency.