Demand side polices exam style

Question 1

What are demand-side polices?

Answer 1

Ways in which government can intervene in the economy to achieve its macro-economic objectives by manipulating the level of aggregate demand

Question 2

What are the two types of demand side policies?

Answer 2

Monetary Policy Controlling the availability of credit (borrowing) and the price (interest rates)

Fiscal policy - changes in government spending and taxation