Current Issues

Question 1

What is a Fiscal Policy?

(describe)

Answer 1

**Changes in taxation. **
Examples of Tax to support answer:
Corporation tax = tax on profits
VAT = tax on goods and services
Income tax = tax on pay
National Insurance Contributions = tax goes towards state pension and NHS

Question 2

What is a Monetary Policy?

(describe)

Answer 2

Money supply and interest rates are controlled by the Bank of England. Controls inflation and they usually want inflation to sit around 2%

(central bank)

Question 3

What reason is there to have a Fiscal Policy?

(4 key points)

Answer 3

• Boost growth in times of recession
• Reduces unemployment –> more goods and services = more staff needed = more people in work = increase in disposable income
• Redistribution of income –> those with a higher income = higher tax = govenment can support people with lower incomes
• Aim = reduces the amount of government borrowing

Question 4

Give an example of how a Fiscal Policy works

(brief answer then 3 points - used to support main points made)

Answer 4

All boost demands; more spending = more income = higher economic growth
1. Reduce Income tax
2. Reduce Corporation tax
3. Increase Gorvernment spending

Question 5

How does Monetary Policy work?

(5 key points)

Answer 5

1. Manage credit and interest rates = affects borrowing for customers = give incentive to spend more; save less
2. Decrease mortgage rates = encourgaing new build and people to move –> less monthly outgoings = more spending
3. Decrease in savers = more spending on consumer goods or houses
4. Decrease business loan rates
5. Weaker exchange rates = boost in imports –> boosting the economy

Question 6

What is Quantitative Easing?

(describe)

Answer 6

Used by the government to introduce ‘new’ money into the economy = succeed whether old or new and increases employment

Question 7

List 3 types of Legislation

(Not including the Equality Act)

Answer 7

• National Minimum Wage Act
• Health and Safe at Work Act
• General Data Protection Regulation (GDPR)

Question 8

What is the National Minimum Wage Act?

(describe)

Answer 8

• If increased by government = increase cost for Uk businesses
• This will reduce profit and opportunity for growth

(Bold = impact)

Question 9

What is the Health and Safety at Work Act?

(describe)

Answer 9

• Appointing specialist staff –> ensures saftey of equipment/procedures = new saftey equipment to meet any new standard thats introduced by the government
• Organisation = liable for workplace injures = compensation paid –> Reducing cash flow

(Bold = impact)

Question 10

What is GDPR?

(describe)

Answer 10

How companies keep a record of info and how/when an individual gives consent to storing personal data = showing an audit trail of consent

(Bold = impact)