| A | B |
|---|
| Macroeconomic objective (definition) | An ambition of government to try to achieve a certain outcome for the economy. |
| A macroeconomic objective | To achieve low and stable inflation. |
| A macroeconomic objective | To maintain a high level of employment and a low level of unemployment. |
| A macroeconomic objective | To encourage economic growth. |
| A macroeconomic objective | To encourage trade and secure a favourable balance of payments. |
| Aggregate demand | Total demand for all goods and services in an economy. |
| Aggregate supply | The total supply of goods and services in an economy. |
| Demand-side policy | Government action to influence aggregate demand. |
| Fiscal policy | A demand-side policy. This involves taxation government spending and government borrowing. |
| Monetary policy | Can be used as a demand-side and supply-side policy. It is a policy that aims to affect the money supply. It includes the control of interest rates. |
| Expansionary fiscal policy | Increasing public spending and/or cutting taxes to boost aggregate demand. |
| A cause of inflation | A large increase in money supply can cause an economy a particular problem. |
| The price of money | This is another name for interest rates. |
| The central bank | In an economy this is the bank of the government and will help support its fiscal and monetary policy. |
| The Bank of England | This is the central bank in the United Kingdom. |
| The Base Rate | This is the interest rate set by the central bank. |
| Open-market operations | Where the central bank borrows or repays debt to the private sector (mainly banks). |
| Treasury Bills | Loans issued by the government and repaid after 3 months. |
| Special Deposits | A way for government to reduce the money supply by forcing banks to deposit money at the central bank. |
| Reducing the tax burden | Lowering the amount of total taxation that people have to pay. |
| Labour market reforms | Laws that are introduced to reduce the power of trade unions. |
| Competition policy | Laws to remove barriers to competition. |
| Privatisation | The transfer and sale of public sector activities to the private sector. |
| Deregulation | The removal of old rules and laws that hinder businesses. |
| Trade-off | A compromise where in order to change one thing means that something else is affected usually a negative effect. |
