QuestionQuestionConceptConceptDocumentDocument

5. Government macroeconomic intervention

Start with Concept to understand a topic, then use Question Bank to check what you know.

4 topics · 16 learning objectives

Your progress

Sign in to see your mastery and mistakes.

  1. 5.1 Government macroeconomic policy objectives

    1. 5.1.1

      • Use of government policy to achieve macroeconomic objectives: price stability, low unemployment, economic growth (policy conflicts and trade-offs are not required)

  2. 5.2 Fiscal policy

    1. 5.2.1Government budget

      • Meaning of government budget

    2. 5.2.2Budget deficit and surplus

      • Distinction between a government budget deficit and a government budget surplus

    3. 5.2.3National debt

      • Meaning and significance of the national debt

    4. 5.2.4Taxation

      • Taxation: - types of taxes: direct/indirect, progressive/regressive/proportional - rates of tax: marginal and average rates of taxation (mrt, art) - reasons for taxation

    5. 5.2.5Government spending

      • Government spending: - types of spending: capital (investment) and current - reasons for government spending

    6. 5.2.6Fiscal policy stance

      • Distinction between expansionary and contractionary fiscal policy

    7. 5.2.7Fiscal policy in AD/AS

      • AD/AS analysis of the impact of expansionary and contractionary fiscal policy on the equilibrium level of national income and the level of real output, the price level and employment

  3. 5.3 Monetary policy

    1. 5.3.1Monetary policy

      • Definition of monetary policy

    2. 5.3.2Monetary policy tools

      • Tools of monetary policy: interest rates, money supply and credit regulations

    3. 5.3.3Monetary policy stance

      • Distinction between expansionary and contractionary monetary policy

    4. 5.3.4Monetary policy in AD/AS

      • AD/AS analysis of the impact of expansionary and contractionary monetary policy on the equilibrium national income and the level of real output, the price level and employment

  4. 5.4 Supply-side policy

    1. 5.4.1Supply-side policy

      • Meaning of supply-side policy, in terms of its effect on LRAS curves

    2. 5.4.2Supply-side objectives

      • Objectives of supply-side policy: increasing productivity and productive capacity

    3. 5.4.3Supply-side policy tools

      • Tools of supply-side policy, for example training, infrastructure development, support for technological improvement

    4. 5.4.4Supply-side policy in AD/AS

      • AD/AS analysis of the impact of supply-side policy on the equilibrium national income and the level of real output, the price level and employment