Reduce Poverty And Inequality

Question 1

Fiscal policy on tax (2+)

Answer 1

Reduce VAT on food as it’s a regressive tax
Increase consumption of healthy food = less stress on NHS

Question 2

Negative of fiscal (2)

Answer 2

Loss revenue as government
Demand pull inflation

Question 3

Monetary policy - IR (2)

Answer 3

Reduce interest rates = cheaper to borrow
But WPiDEC

Question 4

Monetary policy - QE (3)

Answer 4

Banks increase loans = pay 20% VAT = revenue
Demand pull inflation
Low y households won’t have mortgage but will have DEBT so will actually spend on this

Question 5

Why is debt worse for poor

Answer 5

Use loan shark instead of formal banks = much higher IR

Question 6

How many live in absolute poverty

Answer 6

9 million in UK today

Question 7

ER policy

Answer 7

Reduce IR = WPIDEC = good specifically for food because want cheap imports for food

Question 8

Supply side policy + bad (4)

Answer 8

Spend on education schemes = jobs = higher paying jobs
However everyone gets a better education
Very long term
Increas3d fiscal deficit

Question 9

Exmaple of how government tries to create equality (3)

Answer 9

NMW
Inheritance tax
Diversity economy = Sri Lanka’s tourism industry = create jobs