What are the 4 government policies?
-Maintaining full employment.
-Ensuring price stability.
-Achieving high economic growth.
-Balancing exports and imports.
A combination of policies must be used to achieve each objective.
Policies include: fiscal, monetry and supply side policies.
Fiscal is chancing the level of aggregate demand in the economy through tax and government spending.
Monetry (also known as interest rate policy) uses interest rates. This is controlled by the Bank of England.
Supply side policies are any policies which affect supply. They aim to increase the economy's capacity to improve goods and services. They can be used to help any of the government objectives. For example: education and training which improves the quality of the workforce.
Definition- Growth in output of the economy over time- a growth of real GDP (gross domestic product over time.
GDP per capita is: Total GDP divided by population.
Causes of economic growth:
Investment: spending on capital goods.
Technology: as it improves the workforce can better its output.
Workforce: larger means…