Demand Side policies

Question 1

What is the aim of demand side polices

Answer 1

To shift aggregate demand in an economy

Question 2

Fiscal Policy

Answer 2

The use of government spending and taxation to influence AD

Question 3

Monetary Policy

Answer 3

Adjusting interest rates and the money supply to influence AD

Question 4

Quantitative Easing

Answer 4

The process of the central bank creating new money and using it to buy open market asset.

Question 5

Direct taxation

Answer 5

Taxes imposed on an individuals income or profits

Question 6

Indirect taxes

Answer 6

Taxes imposed on the spending on goods and services (can be regressive)