What have been the consequences of the EU referendum on government's macroeconomic policies?
Uncertainty meant the exchange rate depreciated by 11%, so raising the base rate was put on hold as trading relationships are difficult to predict so it is hard to change macroeconomic policies
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What are some other events that can change the direction of the policies?
New technologies, oil price changes, political changes, unstable banking systems, events in trading partners' economies
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What are the changes Chancellor Hammond made in the Autumn Statement 2016?
He changed the target of the budget surplus to be below 2% of GDP by 2020-21, reduce corporation tax to 17% by 2020
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What are economic decisions based on?
What we know about the way economies work, political situation, the party in power
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What are Keynesian policies?
More interventionist; increasing government spending and lowering taxes to stimulate the economy
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What are monetarist policies?
Highly contractionary policies to reduce inflation to help grow the economy steadily
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What are automatic stabilisers?
Economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers on an individual basis
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How is success for evaluating the effectiveness of policies measured?
Steady economic growth, low unemployment, low inflation, high investment and exports, and moderate imports
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What do the effectiveness of these policies depend on?
Political opinion, expectations for each individual policies, how well the government constructs the policy and how much attention is paid to trade-offs
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What are some unintended consequences of policies?
Even if the policy has met its objectives, it can have negative effects on other areas of the economy
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Other cards in this set
Card 2
Front
What are some other events that can change the direction of the policies?
Back
New technologies, oil price changes, political changes, unstable banking systems, events in trading partners' economies
Card 3
Front
What are the changes Chancellor Hammond made in the Autumn Statement 2016?
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