Theme 2: Economic Policy

Question 1

What are the 2 types of economic policy

Answer 1

Demand side policy and supply side policy

Question 2

What are demand side policies?

Answer 2

Demand-side policies, such as reducing income tax, are those that mainly affect
aggregate demand.

Question 3

What are supply side policies?

Answer 3

Supply side policies such as increasing vocational training mainly affect aggregate supply.

Question 4

What are the possible impacts of demand side policies?

Answer 4

Both demand side and supply side effects.

Question 5

Supply-side Policies

Answer 5

Government policies which aim to increase aggregate supply.

Question 6

Demand-side Policies

Answer 6

Government policies which aim to increase aggregate demand.

Question 7

Who manages supply side policies?

Answer 7

The government

Question 8

Who manages demand side policies?

Answer 8

Both the UK government and the Bank of England

Question 9

What are the 2 types of demand side policies?

Answer 9

Fiscal and monetary