Fiscal/Monetary Policy

Question 1

The main 7 government policies

Answer 1

Economic growth
Unemployment
Sustainability
Inequality
Balance of payments
Debt

Question 2

Loose fiscal policy

Answer 2

Increased government spend and decreased taxes

Question 3

Tight fiscal policy

Answer 3

Decreased government spending and increased taxes

Question 4

Effects of tight fiscal policy

Answer 4

Decreased defeceit
Increased unemployment
Decreased growth
Increased sustainability
Increased inequality
Decreased inflation

Question 5

Effects of loose fiscal policy

Answer 5

Increased deficit
Decreased unemployment
Increased growth
Decreased sustainability
Decreased inequality
Increased inflation

Question 6

Monetary policy

Answer 6

Controlling the money supply

Question 7

The 4 monetary tools

Answer 7

Interest rates
QE
Credit available
Exchange rates

Question 8

Loose monetary policy

Answer 8

Lower Intrest rates
Lower QE
Increased credit availabe

Question 9

Nominal interest

Answer 9

Changes in interest rates

Question 10

Real interest

Answer 10

Accounts for inflation

Question 11

Loose monetary policy effects

Answer 11

Increased imports
Decreased deficit
Decreased unemployment
Decreased inequality
Decreased sustainability
Increased inflation
Increased growth

Question 12

Tight monetary policy effects

Answer 12

Decreased imports
Increased deficit
Increased unemployment
Increased inequality
Decreased inflation
Increased sustainability
Decreased growthl

Question 13

Lower interest rates does what for the government

Answer 13

Cheaper to borrow

Question 14

How QE works

Answer 14

Central banks credit money into their accounts to buy bonds leading to a higher demand so it increases the price of bonds which lowers interest rates as a decrease in base rate and this then gives them more to lend, increasing credit availability

Question 15

How QE affects the macro economy

Answer 15

Wealth effect
Borrowing cost effect
Lending effect
Currency effect