T2.6 - Econ

Question 1

What is Fiscal policy?

Answer 1

Any policy relating to government spending, taxation and borrowing
(government led)

Question 2

What is Monetary policy?

Answer 2

Any policy relation to interest rates, the money supply and/or managing the exchange rate
(Central Bank led)

Question 3

What is Supply-side policy?

Answer 3

Any policy intending to increase the “productive potential” of the economy

Question 4

Define Budget (fiscal) deficit

Answer 4

A budget fiscal occurs when government spending exceeds tax revenue

Question 5

Define Budget (fiscal) surplus

Answer 5

A budget surplus occurs when government spending is less than tax revenue