Lesson 12 - Government Policy Flashcards
Who was Margaret Thatcher?
First post-Keynesian prime minister
What did Margaret Thatcher focus on?
- monetary policy to deal with inflation
- help free up labour markets (reduce union power)
What did Gordon Brown do and why?
- made the Bank of England independent (1997)
- stopped the BofE from being used as a political weapon
What did David Cameron focus on and how did he do it?
- lowering the budget deficit
- austerity (cutting government spending and increasing taxes)
What did Theresa May struggle with and what did she focus on?
- Brexit
- focused on stimulating the UK economy due to the difficulty of leaving the EU
What did Boris Johnson do?
- struggled with Covid 19
Who was Gordon Brown?
The chancellor exchequer for Tony Blair, and then later became prime minister
What does the Chancellor exchequer do?
Manage financial policies
When was Tony Blair Prime minister?
1997-2007
When was Gordon Brown chancellor exchequer and when was he prime minister?
Chancellor exchequer
- 1997-2007
Prime minister
- 2007-2010
What party was Gordon Brown and Tony Blair?
Labour
Which prime ministers were part of the conservative party?
Margaret Thatcher, David Cameron, Theresa May, Boris Johnson, Liz Truss and Rishi Sunak
What is the order of the prime ministers?
Thatcher, tony blair, gordon brown, david cameron, theresa may, boris johnson, liz truss, rishi sunak
What did Rishi Sunak do?
The furlough scheme
What are the two types of policies that the government can use?
Demand side and supply side
What is the conflict with using expansionary policies?
- reduce unemployment and create jobs
BUT - risks inflation
What is the conflict with contractionary policies?
- reduce inflation
BUT - risk a hard landing (leading to unemployment)
What does the phillips curve show?
An inverse relationship between unemployment and inflation
What did Phillips argue that the curve showed?
A menu of choice, so if we want to get unemployment down we need to accept inflation
What was Friedmans conclusion on the Phillips curve?
- an increase in AD will lower unemployment
- the increase in demand for goods/services will lead to inflation
- unemployment will return back to NRU once expectations for inflation adjust
- so we reach a new short run Phillips curve, at a higher rate of inflation
- people now act in a way that is expecting of more inflation, so it does not increase
