• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

GCSE: Economy & Economics

Browse by

Currently browsing by:

Word count:
fewer than 1000 (1)

Meet our team of inspirational teachers

find out about the team

Get help from 80+ teachers and hundreds of thousands of student written documents

What are the government's economic objectives?

  1. 1 The government has four main objectives for the economy. These are called macroeconomic objectives. The relative importance of each varies from time to time and they are all interlinked.
  2. 2 Economic growth as measured by an increase in Gross Domestic Product (GDP) which the total value of everything produced in a country. This means that income will be increasing across the country.
  3. 3 Low unemployment means that fewer people are actively seeking employment. It is likely to come at the same time as rising growth. There will always be some unemployment as there will be people between jobs but the government usually likes to minimise it as it is expensive, unpopular and a waste of human resources for the economy.
  4. 4 Low inflation means that prices are only rising slowly. High prices means that goods of the country become less competitive compared to foreign countries and so will lead in the long run to lower growth and more unemployment. Inflation usually increases as growth increases so to achieve both is a difficult balancing act for a government.
  5. 5 Balance of payments equilibrium means that the value of goods and services imported equals the value of goods and services exported. This has become less important as an objective in recent years. Higher growth usually means more imports so the balance of payments also worsens as the economy grows.

What are the government's policies to achieve these objectives?

  1. 1 The government has several weapons it can use to adjust the economy to achieve the best balance of the economic objectives. Some of these are used at any time and some announced in the annual budget.
  2. 2 Interest rates can be increased or reduced to affect the amount of money in the economy. If interest rates are high, it becomes more expensive to borrow money so there will not be as much spent. This is mainly used to reduce inflation. Strictly speaking this is not a government action as the Bank of England decides on the best interest rate in the UK.
  3. 3 If interest rates are reduced, it will increase the amount of money in the economy as it becomes cheaper to borrow and there is less inclination to save money. There should therefore be more investment and spending which should lead to more growth.
  4. 4 The government can change the amount that it taxes and spends. By reducing tax, spending more and borrowing the difference it can increase spending in the economy so stimulating growth. It can increase tax or reduce spending to reduce inflation.
  5. 5 Recently, the Bank of England has tried quantitative easing to increase growth in the economy. This involves increasing the amount of money in circulation, again stimulating spending.

What are the long term policies for growth?

  1. 1 In the long run, the government would like to increase growth without having to use the above measures too much. This involves the use of supply side policies which aim to increase the amount that the economy can produce without setting off inflation.
  2. 2 Policies to increase productivity include privatisation (selling off government owned business so that it can be run competitively), deregulation (making it easier for businesses to compete in certain markets) and stronger competition laws. The aim is that increased competition will force businesses to become more efficient.
  3. 3 Encouraging investment and new businesses should increase growth. The government can give tax breaks for research and development, reduce corporation tax and give encouragement to new businesses.
  4. 4 Making the labour market more competitive should also improve the economy. Measures taken here include reducing the power of trade unions. Improved education and training should also make the workforce more productive.
  5. 5 Tax and spending is used as an incentive for people to work by for instance reducing rates of income tax and reducing welfare payments so people are more inclined to work.

  • Marked by Teachers essays 5
  • Peer Reviewed essays 24
  1. Discuss the Advantages and Disadvantages of International Trade for Elecrox PLC

    If Elecrox PLC were to manufacture their items in Britain, they would have to pay their workers at least the minimum wage of approximately £6,000 a year which is a lot more than the wages in other countries which have been mentioned above. Another factor which Elecrox PLC would benefit from if they committed to manufacturing their products abroad, is that the expense of raw materials will be reduced as natural resources are found more easily and more abundantly in countries such as China, Brazil and Saudi Arabia than in England.

    • Word count: 941

Conclusion analysis

Good conclusions usually refer back to the question or title and address it directly - for example by using key words from the title.
How well do you think these conclusions address the title or question? Answering these questions should help you find out.

  1. Do they use key words from the title or question?
  2. Do they answer the question directly?
  3. Can you work out the question or title just by reading the conclusion?
  • "China was able to survive its crisis in communism (after 1976) because it went for economic reforms and not political reforms." To what extent is this accurate?

    "In conclusion, it is plain to see that Deng Xiaoping's introduction of economic reform greatly aided China's progress and alleviated the crisis of communism. No political reform was initiated by him but this was the very reason why communism remained intact in China, whilst it was obliterated elsewhere."

  • Over the years some theories have been said to influence the foreign exchange rates - Discuss each of these theories and critically evaluate their significance.

    "The theories covered above are relevant in explaining systematic patterns of exchange rate behaviour or long-run behaviours such purchasing power parity or the Fisher effect. The value of these theories for predicting exchange rates is limited basically for the propensity of the unexpected to happen. The real world is characterised by unpredictable unexpected events or "shocks" that are referred to as news. Interest rates, prices and incomes are affected by "news" and the same is true for exchange rates. Periods dominated by unexpected events will result in great fluctuations in spot and forward exchange rates. Since exchange rates are financial asset prices that respond quickly to new information, news on prices will have an immediate impact on exchange rates. Periods dominated by news, observe exchange rates varying a great deal relative to prices, such as periods as the 1970's the 1980's and he early 1990's, where many unexpected economic events occurred and consequently oil prices rose and debt problems appeared. In conclusion exchange rates will remain volatile, while world political events remain unpredictable and therefore no theory will be able to explain or predict exchange rate fluctuations with complete accuracy."

  • Discuss the role Singapore can play in helping her ASEAN neighbours develop their economies, and how this can benefit Singapore in the long run.

    "In conclusion, the development of the other ASEAN economies benefits Singapore greatly as it creates endless opportunities and opens up new markets and generates employment that tap on the managerial and administrative expertise of Singapore. Strong regional economic performance is definitely desirable for Singapore as it promises a vibrant economy and prevents our economy from stagnating. It also gives foreign investors greater confidence in Singapore and gives us brighter economic prospects. Singapore will also prosper in helping these economies develop because of the business opportunities that they present."

Marked by a teacher

This document has been marked by one of our great teachers. You can read the full teachers notes when you download the document.

Peer reviewed

This document has been reviewed by one of our specialist student essay reviewing squad. Read the full review on the document page.

Peer reviewed

This document has been reviewed by one of our specialist student document reviewing squad. Read the full review under the document preview on this page.