Flashcards
Government Economic Objectives and Policies
Cards in this deck (20)
- 1What are government's 4 main economic objectives ?- Low Inflation
- Low unemployment
- Economic Growth
- Healthy balance of payments between imports and exports - 2What's a positive balance of payments?This is when the value of exports in a country is greater than the value of imports
- 3What's inflation?This is the increase in the average price level of goods and services overtime.
- 4Give 3 advantages of low inflation and 3 disadvantages of high inflationAdvantages
- Standard of living increases
- It's easier for companies to expand and set up new ventures
- A rise in real income
Disadvantages
- Reduction in purchasing power
- Minimal job creation
- Increase in the purchase of cheaper foreign goods - 5What is real income?Real income is the value in terms of what can be bought of an income
- 6What's a level of unemployment?The proportion or percentage of the population that are capable of working but are unable to find a job
- 7Give 2 effects of unemployment- The total level of output in the country will be lower than it could be
-A high level of unemployment will cost the government a great deal of money. (unemployment benefits) - 8How will low unemployment benefit a country and its people?It will help increase the country's output and improve workers living standards
- 9What's Gross Domestic Product (GDP)?This is the total value of output of goods and services in a country in one year.
- 10What's economic growth?This is when a country's Gross Domestic Product increases.
- 11Give 3 problems caused by a decline in economic growth?- As output falls, fewer workers are needed and unemployment will occur?
-The average standard of living will drop
- Businesses are unlikely to expand - 12What are the 4 main stages of the trade or business cycle?- Growth
- Boom
- Recession
-Slump - 13Give 3 characteristics of growth-GDP is rising
- unemployment is generally falling
-Living Standards are improving - 14Give 3 characteristics of boom- Prices rise quickly
- There is a shortage of skilled workers
- Business costs rise - 15List 3 characteristics of recession- Too little spending
-GDP falls
-Falling demands and profits for businesses - 16List 3 characteristics of slump- High unemployment
- Prices may fall
- Low level of business survival - 17What's recession?It's a period of falling GDP
- 18What's the difference between exports and imports?Exports are goods and services sold from one country to other countries while imports are goods and services bought in by one country from other countries
- 19State some problems caused by having a balance of payments deficit- The country may experience exchange rate depriciation
-The country may run out of foreign currencies and may have to borrow - 20What's an exchange rate depreciation?This is a fall in the value of a currency compared with other currencies.
Information
- Description
- IGCSE Business Studies - Section 6, Chapter 26
- Created by
- Christel Dickson · Mar 2017
- Updated
- Mar 22, 2017
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