how the government intervenes?

Question 1

indirect taxation

Answer 1

it is something that is paid for by the government and the consumer pays the tax for the product when they buy it.such as: cigarettes and alcohol.

Question 2

direct taxation

Answer 2

this is tax paid by an individual which is specifically for them not everyone such as: property tax, income tax etc.

Question 3

price controls

Answer 3

the minimum or maximum prices set by the government for specific goods. this is usually to make sure to control the affordability of certain goods.

Question 4

regulations

Answer 4

a broad definition is rules put in place by the government and are put in place mainly for the private sector with penalties used to control economic behaviour

Question 5

public expenditure

Answer 5

spending made by the government on needs and wants of the country such as pensions, infrastructure etc.

Question 6

what is a subsidy and what is its aim?

Answer 6

it is financial aid/support from the government to suppliers so they reduce their costs. The aim is to increase supply and reduce the equilibrium price within the market.