MACROECONOMICS CLASS 2020
click to edit
click to edit
macroeconomy
Quizlet link with all the content: https://quizlet.com/477478566/igcse-economics-unit-4-flash-cards/
4.1 The role of the government
Local level
Has the authority to implement policies within the local geographical area
Undertake public activities
Collect taxes
Implement a local budget
The budget is spent on the welfare of the local area, providing different goods and services such as:
Public libraries
Internal roads
Housing
Public parks
Hospitals
Schools
National level
The public sector is an employer, producer and consumer in modern economies
Employer:
Main aim is to increase employment levels
The goverment employs workers, managers and executives to manage it administrative departments
The government can control price levels in the economy by implementing price controls and wages in the economy
Increase productivity by providing training and pension schemes
Producer:
Public services are provided by the government
These services are provided at a very low price
Industries that are in the public sector are called natural monopolies
the government can also own strategic industries that are important for economic development
Consumer:
To provide public goods the government demand goods and servies from the private sector
International level
Trade between countries is important for economic growth and economic development
Some countries have free-trade policies, having no restrictions on exports and imports
some countries place trade restriction in the form of tariffs and quotas
4.2 macroeconomic aims
low and stable rate of income
low rate of unemployment
Balance of payments
equitable distribution of income
Stable economic growth and increase in GDP
Economic growth refers to an increase in the real quantitiy of goods and services produced in an economy over a period of time, or an increase in real gross domestic product (GDP)
Every government aims to achieve sustainable, long term economic growth and increase the productive potential of the economy. When the quality and quantity of the factors of production increase, economic growth is achieved.
Economic growth on a PPC curve: An outward shift indicates long-term economic growth