4.3.5 - The role of the state in the macroeconomy

The distinction between capital expenditure, current expenditure and transfer payments.

Use a - distinction between capital expenditure, current expenditure and transfer payments to connect the rule to the data and decision in the question.

This matters because a - distinction between capital expenditure, current expenditure and transfer payments determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between capital expenditure, current expenditure and transfer payments to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between capital expenditure, current expenditure and transfer payments is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Reasons for the changing size and pattern of public expenditure in an international context:; changing incomes; changing age distributions; changing expectations.

Use b - reasons for the changing size and pattern of public expenditure in an international to connect the rule to the data and decision in the question.

This matters because b - reasons for the changing size and pattern of public expenditure in an international determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - reasons for the changing size and pattern of public expenditure in an international to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Reasons for the changing size and pattern of public expenditure in an international is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The significance of differing levels of public expenditure as a proportion of GDP on:; productivity and growth; crowding out; levels of taxation.

Use c - significance of differing levels of public expenditure as a proportion of gdp on: • to connect the rule to the data and decision in the question.

This matters because c - significance of differing levels of public expenditure as a proportion of gdp on: • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - significance of differing levels of public expenditure as a proportion of gdp on: • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - significance of differing levels of public expenditure as a proportion of GDP on: • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between, and examples of, direct and indirect taxes.

Use a - distinction between, and examples of, direct and indirect taxes to connect the rule to the data and decision in the question.

This matters because a - distinction between, and examples of, direct and indirect taxes determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between, and examples of, direct and indirect taxes to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between, and examples of, direct and indirect taxes is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between progressive, proportional and regressive taxes.

Use b - distinction between progressive, proportional and regressive taxes to connect the rule to the data and decision in the question.

This matters because b - distinction between progressive, proportional and regressive taxes determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between progressive, proportional and regressive taxes to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between progressive, proportional and regressive taxes is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The economic effects of changes in direct and indirect tax rates on:; incentives to work; tax revenues: Laffer curve analysis; income distribution; real output and employment; the price level; the trade balance; FDI flows.

Use c - economic effects of changes in direct and indirect tax rates on: • incentives to work • to connect the rule to the data and decision in the question.

This matters because c - economic effects of changes in direct and indirect tax rates on: • incentives to work • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - economic effects of changes in direct and indirect tax rates on: • incentives to work • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - economic effects of changes in direct and indirect tax rates on: • incentives to work • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between: borrowing and; fiscal deficits and fiscal surpluses public sector debt; automatic stabilisers and discretionary fiscal policy; a fiscal deficit and the national debt; structural and cyclical fiscal deficits.

Use a - distinction between: borrowing and • fiscal deficits and fiscal surpluses public sector to connect the rule to the data and decision in the question.

This matters because a - distinction between: borrowing and • fiscal deficits and fiscal surpluses public sector determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between: borrowing and • fiscal deficits and fiscal surpluses public sector to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between: borrowing and • fiscal deficits and fiscal surpluses public sector is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Factors influencing the size of fiscal deficits and national debts.

Use b - factors influencing the size of fiscal deficits and national debts to connect the rule to the data and decision in the question.

This matters because b - factors influencing the size of fiscal deficits and national debts determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - factors influencing the size of fiscal deficits and national debts to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Factors influencing the size of fiscal deficits and national debts is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The significance of the size of fiscal deficits and national debts:; impact on interest rates; debt servicing; intergenerational equity.

Use c - significance of the size of fiscal deficits and national debts: • impact on interest to connect the rule to the data and decision in the question.

This matters because c - significance of the size of fiscal deficits and national debts: • impact on interest determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - significance of the size of fiscal deficits and national debts: • impact on interest to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - significance of the size of fiscal deficits and national debts: • impact on interest is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How governments use fiscal policy, monetary policy, exchange- policies rate policy, supply-side policies and direct controls to:; reduce fiscal deficits and national debts; control the rate of inflation; respond to external shocks in the global economy; reduce poverty and inequality.

Use a - governments use fiscal policy, monetary policy, exchange- policies rate policy, to connect the rule to the data and decision in the question.

This matters because a - governments use fiscal policy, monetary policy, exchange- policies rate policy, determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - governments use fiscal policy, monetary policy, exchange- policies rate policy, to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - governments use fiscal policy, monetary policy, exchange- policies rate policy, is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Use of demand-side policies in response to the global financial crisis of 2008.

Use b - use of demand-side policies in response to the global financial crisis of 2008 to connect the rule to the data and decision in the question.

This matters because b - use of demand-side policies in response to the global financial crisis of 2008 determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - use of demand-side policies in response to the global financial crisis of 2008 to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Use of demand-side policies in response to the global financial crisis of 2008 is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Measures to control TNCs:; to reduce tax avoidance; the regulation of transfer pricing; limits to government ability to control TNCs.

Use c - measures to control tncs: • to reduce tax avoidance • the regulation of transfer to connect the rule to the data and decision in the question.

This matters because c - measures to control tncs: • to reduce tax avoidance • the regulation of transfer determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - measures to control tncs: • to reduce tax avoidance • the regulation of transfer to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Measures to control TNCs: • to reduce tax avoidance • the regulation of transfer is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of policy changes on:; local economies; national economies; the global economy.

Use d - impact of policy changes on: • local economies • national economies • the global economy to connect the rule to the data and decision in the question.

This matters because d - impact of policy changes on: • local economies • national economies • the global economy determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - impact of policy changes on: • local economies • national economies • the global economy to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - impact of policy changes on: • local economies • national economies • the global economy is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Problems facing policymakers when applying policies:; inaccurate information; risks and uncertainties; inability to control external shocks.

Use e - problems facing policymakers when applying policies: • inaccurate information • risks to connect the rule to the data and decision in the question.

This matters because e - problems facing policymakers when applying policies: • inaccurate information • risks determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply e - problems facing policymakers when applying policies: • inaccurate information • risks to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: e - Problems facing policymakers when applying policies: • inaccurate information • risks is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.