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IGCSEEconomicsCambridge (CIE)Flashcards4. Government & the Macroeconomy4.1 The Role of Government

4.1 The Role of Government (Cambridge (CIE) IGCSE Economics)

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  • What is a mixed economy?

    A mixed economy is an economic system that combines elements of both free market capitalism and government intervention.

  • Define the term government intervention.

    Government intervention refers to the involvement of the government in economic affairs through policies, regulations, and other measures.

  • How are levels of government categorised?

    Government roles are categorised into local, national (macroeconomic), and international levels of intervention.

  • State the meaning of local government.

    Local government refers to the administrative bodies responsible for delivering public services within a specific geographic area, such as a town or region.

  • Define the term fiscal policy.

    Fiscal policy refers to the government's policies related to taxation, spending, and borrowing to influence the economy.

  • What does monetary policy mean?

    Monetary policy refers to the actions taken by a central bank to control the supply of money and interest rates in an economy.

  • State the meaning of supply-side policy.

    Supply-side policy refers to government policies aimed at increasing the productive capacity and efficiency of an economy.

  • How do governments intervene internationally?

    Governments intervene internationally through measures such as exchange rate interventions and protectionism to influence international trade and competitiveness.

  • Define exchange rate intervention.

    Exchange rate intervention is the process of a central bank buying or selling its own currency in the foreign exchange market to influence the exchange rate.

  • What is protectionism?

    Protectionism refers to government policies that restrict international trade to protect domestic industries from foreign competition.

  • True or False?

    All economies are mixed economies.

    True.

    With the exception of North Korea, every economy in the world is a mixed economy with varying degrees of government intervention.

Previous:3.8 Market StructureNext:4.2 The Macroeconomic Aims of Government

    1. Topic 1

      1.1 The Nature of the Economic Problem

    2. Topic 2

      1.2 The Factors of Production

    3. Topic 3

      1.3 Opportunity Cost

    4. Topic 4

      1.4 Production Possibility Curves

    1. Topic 1

      2.1 Microeconomics & Macroeconomics

    2. Topic 2

      2.2 The Role of Markets in Allocating Resources

    3. Topic 3

      2.3 Demand

    4. Topic 4

      2.4 Supply

    5. Topic 5

      2.5 Price Determination

    6. Topic 6

      2.6 Price Changes

    7. Topic 7

      2.7 Price Elasticity of Demand (PED)

    8. Topic 8

      2.8 Price Elasticity of Supply (PES)

    9. Topic 9

      2.9 Market Economic System

    10. Topic 10

      2.10 Market Failure

    11. Topic 11

      2.11 Mixed Economic System

    1. Topic 1

      3.1 Money & Banking

    2. Topic 2

      3.2 Households

    3. Topic 3

      3.3. Workers

    4. Topic 4

      3.4 Trade Unions

    5. Topic 5

      3.5 Firms

    6. Topic 6

      3.6 Firms & Production

    7. Topic 7

      3.7 Firms’ Costs, Revenue & Objectives

    8. Topic 8

      3.8 Market Structure

    1. Topic 1

      4.1 The Role of Government

    2. Topic 2

      4.2 The Macroeconomic Aims of Government

    3. Topic 3

      4.3 Fiscal Policy

    4. Topic 4

      4.4 Monetary Policy

    5. Topic 5

      4.5 Supply-side Policy

    6. Topic 6

      4.6 Economic Growth

    7. Topic 7

      4.7 Employment & Unemployment

    8. Topic 8

      4.8 Inflation & Deflation

    1. Topic 1

      5.1 Living Standards

    2. Topic 2

      5.2 Poverty

    3. Topic 3

      5.3 Population

    4. Topic 4

      5.4 Differences in Economic Development

    1. Topic 1

      6.1 International Specialisation

    2. Topic 2

      6.2 Globalisation, Free Trade & Protection

    3. Topic 3

      6.3 Foreign Exchange Rates

    4. Topic 4

      6.4 Current Account of Balance of Payments