Government Policy and the Economy (AQA A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
Fiscal policy
Fiscal policy
Managing economy through tax rates & govt spending
Monetary policy
Monetary policy
Adjusting interest rates to control inflation & exchange rates
Direct taxes
Direct taxes
Taxes paid directly to govt (e.g., income tax)
Indirect taxes
Indirect taxes
Taxes paid when buying goods/services (e.g., VAT)
Disposable income
Disposable income
Money left after tax that can be spent
Corporation tax
Corporation tax
Tax limited companies pay on profits
Business rates basis
Business rates basis
Tax based on value of premises (buildings & land)
When is expansionary fiscal policy used?
When is expansionary fiscal policy used?
During slowdowns/high unemployment - cuts taxes/raises spending
High interest rates effect on exchange rate
High interest rates effect on exchange rate
Exchange rate rises (pound strengthens)
Protectionism
Protectionism
Govt protects domestic businesses from foreign competition