Scribd
Upload
164 views2 pages

ASAL Economics Lang Worksheet 29.1 Answers

This document provides a table describing how different government policies can impact a country's current account balance. The table lists 7 common government policies, describes the impact of each policy on aggregate demand and supply, and gives an example of each policy's effect on the current account balance.

Uploaded by

Matej Milosavljevic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
164 views2 pages

ASAL Economics Lang Worksheet 29.1 Answers

This document provides a table describing how different government policies can impact a country's current account balance. The table lists 7 common government policies, describes the impact of each policy on aggregate demand and supply, and gives an example of each policy's effect on the current account balance.

Uploaded by

Matej Milosavljevic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

CAMBRIDGE INTERNATIONAL AS & A LEVEL ECONOMICS

Language worksheet 29.1 answers


Revision
3 Government Policy Impact Effect on current account Example

Fiscal deficit Increases aggregate If spending is increased on The USA often runs a fiscal
demand, may encourage imports, it will reduce a deficit and has a deficit on
consumers to purchase surplus on the current the current account of the
more imports. account or increase balance
a deficit on the of payments.
current account.

Fiscal surplus Decreases aggregate May reduce spending on Germany often runs a
demand and spending. imports and reduce a fiscal surplus, has high
current account deficit. savings, and the highest
current account surplus.

Central bank increases Decreases May reduce spending on The UK uses interest rates
Interest rates. aggregate demand. imports and reduce a to reduce deficits on the
current account deficit. It current account.
may also increase the
strength of the currency
and make imports
cheaper and exports
more expensive.

Government announces Increases investment and Improved structure may HS2 in the UK or the
an expansion of the expands aggregate supply. reduce a current account ‘Bullet train’ network
railway network. deficit in the long run. in China

Government increases Improves skills and makes May encourage spending Coursebook Activity 29.1
spending on education. firms more competitive. on domestic products as on Zimbabwe
they are more
competitive. May reduce
deficit in the long run.

Government announces Reduces demand for May reduce current Coursebook Activity 26.2
tariffs on all imported imports and consumer account deficit. on Norway
dairy goods. welfare. May prompt a
trade war.

Government subsidises Helps employment and Maintains the status quo Coursebook Chapter
the steel industry. preserves jobs, stops in the short term of the 26 Economics in context
potential imports. current account. In long on Russia
term exports of steel
may grow.

Government purchases A weak currency Will decrease a deficit and Coursebook Chapter
foreign currency increases exports and increase a surplus on the 29 Economics in context
to weaken their decreases imports. current account. on China
own currency.

1
Cambridge International AS & A Level Economics – Vlachonikolis, Collins & Croft © Cambridge University Press 2021
CAMBRIDGE INTERNATIONAL AS & A LEVEL ECONOMICS

2
Cambridge International AS & A Level Economics – Vlachonikolis, Collins & Croft © Cambridge University Press 2021

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy