Macroeconomic policy - OCR A-Level Economics (H460) quiz

Higher government spending and/or lower taxes

Higher taxes and lower government spending

Higher interest rates

Selling government bonds to reduce the money supply

The amount the government borrows in a single year

The accumulated total the government owes

The annual budget surplus

The difference between exports and imports

Everyone pays the same amount

The average tax rate falls as income rises

The average tax rate rises as income rises

It is levied on spending

Requiring the government to announce a brand new Budget every single quarter

Setting the central bank's interest rate to stabilise demand over the cycle

Privatising state industries to make the wider economy more efficient over time

Changing tax receipts and benefit spending automatically as income changes

Set by the government and pursued by the independent Bank of England

Set by the independent Bank of England and then pursued directly by the government

Set and then actively pursued by Parliament directly through votes on the rate

Set by the Office for Budget Responsibility and met by the Treasury each year

Lowering the cost of borrowing for firms and households

Raising borrowing costs and the reward for saving

Weakening the exchange rate and boosting net exports

Raising asset prices and household wealth across the economy

Inflation is running far above the central bank's official target rate

The government's budget is in a large and sustained surplus position

Interest rates are already very low, near the zero bound

The exchange rate is fixed against a foreign currency by the central bank

Shift the aggregate demand curve to the right

Raise the inflation rate

Increase the budget deficit permanently

Shift long-run aggregate supply to the right

Government spending on education and training

Cutting the basic rate of income tax to sharpen work incentives

Deregulating the labour market

Privatising a state industry

A positive relationship between inflation and unemployment

An inverse trade-off between inflation and unemployment

No relationship between inflation and unemployment

That unemployment is always zero

Downward-sloping

Horizontal at the current target rate of inflation

Vertical at the natural rate of unemployment

Upward-sloping

Cannot raise the economy's productive capacity in any way

Always raise inflation

Have no effect on unemployment

Take a long time to have an effect and can be costly