Government macroeconomic aim

____-push inflation occurs when prices are pushed up by increases in the cost of production.

The percentage rise in an economy's price level over a period of time is called

• inflation

• inflation rate

• price stability

• hyperinflation

What is the name of the condition where inflation rate falls but is still positive.

• Disinflation

• Deflation

In which circumstances will a reduction in unemployment NOT result in a rise in inflation?

• Foreign firms becoming more price competitive

• The government redistributing income from the rich to the poor

• The newly employed being paid the same as existing workers but being less productive

• A high proportion of the rise in income being spent on imports

What is a motive for a government to aim for low unemployment?

• To maintain price stability

• To avoid decline in human capital

• To reduce upward pressure on wages

• To ensure output does not change

Government macroeconomic policy aims to achieve balance of ________ equilibrium

_____ fiscal policy is achieved by increasing government spending and cutting tax rates.

2 of government macroeconomic policy aims are

• Full employment

• Fast economic growth

• High purchasing power

• Sustainable economic development

Select an instrument of fiscal policy

• Exchange rate system

• Interest rate

• Taxation

• Government subsidy