Practise macroeconomic objectives and government intervention through fiscal, monetary and supply-side policies, using AD/AS analysis, tax design and policy-effectiveness evidence.
Sweden had a change in its Consumer Prices Index (CPI) of -0.6 %.
Which combination of policies might its government use to restore price stability?
increase interest rates and increase indirect taxes
increase interest rates and reduce government spending
reduce government spending and increase income tax
reduce interest rates and increase government spending
D
Which statement about government budget surpluses and deficits is the most accurate?
A surplus implies that the balance of payments is in surplus.
A surplus implies that the government is spending too much money.
A deficit implies that the economy is in decline.
A deficit implies that the national debt is increasing.
D
A government wants to use an expansionary monetary policy.
What should the government increase?
credit regulations
the exchange rate
the interest rate
the money supply
D
What is the equivalent of a country's national debt?
the accumulated borrowing of the government
the difference between government spending and taxation
the interest paid by the government on all the money it owes
the total money owed by all households in the country
A