Fiscal Policy
- The use of government spending, taxation and borrowing to achieve relevant economic objectives
Main taxes
- Income tax
- Corporation tax
- VAT
Main tax expenditures
- Health
- Education
- Social Security
What happens if government spending is greater than taxes?
- Budget deficit
Monetary Policy
- The use of interest rates and changes to the money supply to achieve relevant economic objectives
Who manages monetary policy?
- The Bank of England (Monetary Policy Committee)
- Their main aim is to try and keep inflation around 2%
- Look to support stability and economic growth
Open Trade and Protectionism
- The opposite of free/open trade
- The main aim is to protect domestic businesses and industries from any overseas competition and prevent the outcome resulting solely from open trade
Tariffs
- A tariff or tax/duty that raises the price of imported products
- An attempt to reduce the domestic demand for the specific imported products
- Intended to allow domestic suppliers to scale up
Quotas
- Limits on the quantity of imports allowed or a limit to the value of imports permitted into a country over a specific time frame
Non-tariff barriers
- Other regulations such as labelling requirements or quality standards
- They are administrative, technical and regulatory obstacles to trade
Export subsidies
- Payments to encourage domestic production by lowering their costs
Domestic subsidies
- Domestic subsidies involve government help or state aid for domestic businesses facing financial problems