Macroeconomic Policies

Question 1

what is fiscal policy?

Answer 1

changing taxes and government spending

Question 2

Examples of indirect tax

Answer 2

V.A.T/ tariffs

Question 3

Examples of direct tax

Answer 3

income, corporation, national insurance

Question 4

what is monetary policy?

Answer 4

Changing interest rates and the supply of money

Question 5

what is quantitive easing?

Answer 5

Bank of England adds £375billion to bank account, bought assets, so the yields ( return on investment doesn’t change if value increases)go down, assets are sold giving greater liquidity, lending more money which shifts AD right.

Question 6

How much did UK Gov in QE?

Answer 6

Currently £425 billion

Question 7

what are drawbacks?

Answer 7

An increase in assets means rich get richer and the uncertain expectations

Question 8

What is contractionary policy?

Answer 8

Restricting AD- increase interest rates

Question 9

what is expansionary policy?

Answer 9

Increase AD- decrease interest rates

Question 10

Give examples of Interventionist supply side policies

Answer 10

Infrastructure, subsidies, labour market reform, invest in education

Question 11

Give examples of Free Market Supply side policies

Answer 11

Promote immigration, welfare reforms, reduce income tax, privatisation, deregulation

Question 12

what are the main issues with SS Policy?

Answer 12

Expensive and unpopular