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What is an economic policy?
A plan or decision made by the government to influence the economy.
What are the two main types of government economic policy?
Fiscal policy and monetary policy.
Which policy deals with tax and government spending?
Fiscal policy.
Which policy deals with interest rates and money supply?
Monetary policy.
Give one example of fiscal policy.
Increasing taxes / government spending / reducing VAT.
Name one aim of government economic policy.
Economic growth / employment / redistributing wealth / developing infrastructure / regional development.
Why does the government aim to promote economic growth?
To create jobs and increase incomes.
What does redistributing wealth mean?
Using taxes and welfare to reduce the gap between rich and poor.
Give one example of infrastructure.
Roads / hospitals / schools / public transport.
Who benefits from increased government spending on healthcare?
Individuals and society.
Give one positive impact of government policy on households.
Higher standard of living / better public services
Give one negative impact of government policy on households.
Higher taxes / higher interest rates.
How can government policy help businesses?
Grants, supports, or encouraging new start-ups.
What is one negative impact of government policy on businesses?
Increased costs / reduced profits.
How can government policy benefit society?
Increased employment / improved health.
What is inflation?
A general increase in prices.
