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.