What are the 4 macro-economic objectives of the UK governement?

What are the 3 policy instruments used by the government to achieve these objectives?

Define the Fiscal policy.

What is capital spending?

What is current spending?

What is transfer spending?

What are the 2 types of taxes levied by the government?

What is meant by a fiscal surplus, and what effect will they have on the economy?

What is meant by a fiscal deficit and what effect will it have on the economy?

What is the difference between an expansionary and contractionary fiscal policy?

Define austerity.

What effect will higher government spending have on the economy?

What effect will a decrease government spending have on the economy?

How can the fiscal policy correct market failure regarding the consumption of merit and demerit goods?

How can the fiscal policy be used to correct externalities in?

How can the fiscal policy reduce income inequalities?

What is the monetary policy?

Who is responsible for conducting the governments monetary policy?

What is the core process of the Bank of England?

What is the target rate of inflation set by the government for the Bank of England?

Who is responsible for setting the base rate of inflation in the UK?

How will the MPC respond to a high rate of inflation?

How will the MPC respond to a low rate of inflation?

What effect will a rise in interest rates on the exchange rate?

What effect will a fall in interest rates have on the exchange rate?

What is quantitative easing?

What effect will quantitative easing have on the economy?

When can quantitative easing generate inflationary pressures?

Define supply side policies.

How can cutting taxes on income and profits incentivise employers and employees?

What effect does liberalising markets have on consumers?

How can improving the mobility of labour encourage employment?

How can deregulation improve the productive efficiency of firms?

How can the government prevent trade unions disrupting production?

How is migration a supply side policy?