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Economic objectives and role of government - Coggle Diagram
Economic objectives and role of government
Supply-side Policy
Low Unemployment
Claimant Count
Includes those who are claiming unemployment-related benefits
Types of unemployment
Cyclical
Seasonal
Frictional
Structural
Calculation of unemployment rate
number of unemployed / workforce x 100
Fair Distribution of Income
Types of Income
Wages
Rent
Profit
Interest
State benefits
Meaning
How all money flowing in an economy is shared between individuals
Fiscal Policy
Purpose of government spending
Supply goods and services that private sector fail to do
Supply goods and services too costly for people
Reduce poverty
Supports the economy
Direct Taxes
Income tax
National insurance
Capital gains
Inheritance tax
Corporation tax
Indirect tax
VAT
Excise
Customs duties
Meaning
Use of taxation and government spending to affect the level of economic activity
Spending
Increase economic growth
Increase employment
Increase inflation
Possibly worsen balance of payments
Monetary Policy
Economic Growth
Meaning of Economic Growth
Economic growth is increase in economic activity in a country shown by value of output (GDP)
Total value of output produced is equal to total of income in an economy and total spent.
Total Output = Total Income = Total Spending
GDP per capita
Calculated by dividing total GDP by population size
Determinants of economic growth
Investment
Change in tech
Size of workforce
Education and training
Natural resources
Government Policies
Price Stability
Limitations of markets