Government Revenue: Money which the Government earns from levying taxes on individuals and firms

Tax: A fee charged by a government on a product, income or activity

Direct Tax: A tax paid directly by the person or organization on whom it is levied. A direct tax is charged on individuals' or firms' income. EG income tax or corportion tax

Indirect Tax: A tax on spending on goods and services

EG Vat-20% and exise duty

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  • Fiscal Policy: The use of taxes and govenment spending to achieve a governments economic objectives.
  • Budget deficit: Where government spending is higher than government revenue. This means that the government will have to borrow money to make sure that revenue is higher
  • Budget surplus: Where government spending is lower than government revenue
  • Monetary policy: The use of interest rates and the money supply to achieve a government's economic objectives
  • Interest rate: The cost of borrowing money. There are many different types: mortagage rate; credit card lending rate; bank deposit rate
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All the notes in the book

MacroEconomic Objectives:

1) Low unemployment

2) High economic growth

3) Low and stable inflation

4) Positive balance of (Exports-Imports)

Economic Growth

Economic Growth is the growth of the country's output over time. It is measured using GDP(Gross Domestic Product)

Growth Rate= GDP2-GDP1 X 100%


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