Government Economic Policy

Question 1

Define the term government economic policy

Answer 1

Government economic policy refers to all the ways in which the government tries to have an impact on the economy.

Question 2

Define the term fiscal policy

Answer 2

Fiscal policy is how the government sets the levels of taxation and spending in the economy in order to achieve its economic goals.

Question 3

Define the term monetary policy

Answer 3

Monetary policy is used to control the supply of money available in an economy at a particular time. It is also used to set interest rates and to help control inflation.

Question 4

Define the term industrial policy

Answer 4

The government’s industrial policy encourages the development and growth of the three sectors of the economy (primary, secondary and tertiary).

Question 5

Define the term indigenous firms

Answer 5

Indigenous firms are business that are established and owned by local people.

Question 6

Define the term foreign direct investment

Answer 6

Foreign direct investment occurs when a foreign company invests in our country, perhaps by building a factory or a shop to produce and sell its goods or services.