| Question | Answer |
| Define full employment | most people willing and able to work are currently working
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Give 1 reason why a government seeks price stability | greater economic certainty
| What is fiscal policy? | manipulation of G and T to influence AD
| What type of monetary policy can be used during inflation? | deflationary MP
| What is the effect of supply-side policy on Aggregate Supply? | increase
| A government gives tax incentives to producers. What kind of policy is this? | supply-side
| What is inflationary monetary policy? | raise money supply, decrease interest rate
| What is inflationary fiscal policy? | raise govt exp, decrease tax
| Give 1 reason why a government redistributes income? | close income gap, enhance standard of living of the poor
| Why does the government act as an employer? | operate state owned enterprises
| Formulate the unemployment rate. | number unemployed/labour force times 100
| What is a merit good? | one having high external benefits
| Give an example of a macroeconomic concern/issue. | inflation, unemployment
| What is price stability? | low and stable inflation
| What is the name of the policy which raises market efficiency? | supply-side policies
| What is BOP stability? | match import expenditure with export revenue
| What is a budget? | govt plan of expenditure and revenue
| Define income redistribution. | taking money from rich and giving to poor
| What is a budget surplus? | govt revenue from tax > govt expenditure
| Give one way of raising money supply. | printing money |
