Unit 1 Topic 2

Question 1

The Budget

Answer 1

Occurs once a Fiscal (Financial)Year
The government outlines how much money it will bring in and how it will be used.

Question 2

GDP - Gross Domestic Product

Answer 2

The monetary value of all goods & services produced within the country

Question 3

Economic Activity

Answer 3

Measured in GDP
Inflation target 2% - with 1% diversion either way.

Question 4

Disinflation

Answer 4

A fall in the rate of inflation

Question 5

Deflation

Answer 5

A general fall in the price of goods & Services

Question 6

Consumer Price Index

Answer 6

A general basket of consumer goods changes over time

Question 7

Bank Rate

Answer 7

Rate the Boe lends to other financial institutions.

Question 8

Recession

Answer 8

A significant decline in economic activity over a sustained periods (2 quarters )

Question 9

Macroeconomic Objectives

Answer 9

Price Stability
Low Unemployment
Balance Of payment equilibrium
Satisfactory Economic growth

Question 10

Fiscal Policy

Answer 10

Fiscal policy is the use of government spending and taxation to influence the economy

Question 11

Monetary Policy

Answer 11

Monetary policy is the action a central bank or a government can take to influence how much money is in a country’s economy and how much it costs to borrow

Question 12

Regulation

Question 13

Directive