gcse economics - tools of the trade: introduction to government objectives and targets
• WHAT TAXES DO WE PAY?
• WHY DO WE PAY SO MUCH TAX?
• WHAT DOES THE GOVERNMENT SPEND MONEY ON?
• WHY IS IT SO IMPORTANT WHEN INTEREST RATES CHANGE?
• WHY IS THE EXCHANGE RATE SO IMPORTANT
• SHOULD WE PRIVATISE THE ECONOMY?
HOW DOES THE GOVERNMENT TRY TO ACHIEVE ITS TARGETS?
They use their TOOLS OF THE TRADE
• Change taxes e.g. income, VAT, corporation – this can affect the level of an individuals’ disposable income
• Increase Government spending – roadbuilding, spending on benefits, grants to businesses
• Change interest rates – this can influence a persons’ disposable income and affect the cost of borrowing (see interest rates)
• Influence the exchange rate – to make it easier to export or cheaper to import.
Use supply side policies – cutting benefits to unemployed or privatisation
These GCSE Economics revision notes have been kindly provided by Peter Davies of Mill Hill School, Ripley
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