Government macroeconomic intervention (A level)

Question 1

Sustainable development

Answer 1

development that ensures that the needs of the present generation can be met without harming the well-being of future generations

Question 2

Philips curve

Answer 2

a curve that shows the relationship between the unemployment rate and the inflation rate over a period of time

Question 3

Expectations-augmented Philips curve

Answer 3

a diagram that shows that while there may be a trade-off between unemployment and inflation in the short run, there is no trade-off in the long run

Question 4

Crowding out

Answer 4

the idea that higher public sector spending will just replace private sector spending

Question 5

Crowding in

Answer 5

the idea that higher public sector spending will increase private sector spending

Question 6

Laffer curve

Answer 6

a curve showing tax revenue rising at first as the tax rate is increasing and then falling beyond a certain rate

Question 7

Government macroeconomic failure

Answer 7

government intervention reducing rather than increasing economic performance

Question 8

Counter-cyclically

Answer 8

going against the fluctuations in economic activity