gcse economics - tools of the trade: introduction to government objectives and targets
KEY QUESTIONS
• WHAT TAXES DO WE PAY?
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WHY DO WE PAY SO MUCH TAX?
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WHAT DOES THE GOVERNMENT SPEND MONEY ON?
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WHY IS IT SO IMPORTANT WHEN INTEREST RATES CHANGE?
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WHY IS THE EXCHANGE RATE SO IMPORTANT
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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.
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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 Keep Up-todate with your GCSE Economics - Subscribe Free to Economics in the News by Email
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