CSEC Economics - Economic Management and Policy Goals PP - Solutions
CSEC Economics - Economic Management and Policy Goals PP - Solutions
CSEC Economics - Economic Management and Policy Goals PP - Solutions
2018Q4
1.
a. Define the term fiscal policy
Fiscal policy is a tool used by the government to achieve its goals for the
economy. These tools are the increasing or decreasing of taxes and government
spending.
Cyclical
Seasonal
Frictional
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Structural
Demand pull inflation occurs when there is 'too much money chasing too few goods'. It occurs
when aggregate demand exceed supply putting upward pressure on prices. Governments
decision to reduce taxes could leading to increasing spending across the economy and higher
prices..
Cost push inflation occurs when there is a rise in the cost of one of the factors of production
which drives up the prices of goods and services. For example a rise in the cost of labour
results in higher cost of production across the economy and higher prices.
2014Q4
1.
a. Define the term ‘economic goals’ (2 marks)
Economic goals are the aims or objectives that an organization or the
government wishes to achieve during the course of its activities.
It does not account for the sustainability of growth or for what incomes are spent
on.Some countries may may have experience a one off growth spurt due to
resource discovery but this not not necessarily translate into higher quality of life
as incomes may not necessarily have been spent on goods to increase
sustainable growth or improve quality of life
d. Table 3 shows the economic statistics for country Y. Calculate the gross
domestic product (GDP) using the information provided in table 3 . Hint use
the expenditure approach (4 marks)
GDP = C + I + G + (X - M)
GDP = 900+ 500+300+(300-400)
GDP = 1600