GOVERNMENT AND THE MACROECONOMYThis
Module should be read in conjunction with the
Programme of Study.The
Programme of Study lists the Topics that are in the Module and gives you the relevant page references to your course book. This
Module aims to give you more direction as you work through the various topics. It will aim to highlight the most important items in the Topic, as well as areas that need particular care. It will also point you towards the Resources, that you should be using as well as listing the textbook pages to be read.
Remember to double-check with the
Syllabus that you cover
all the items that you need to. The Section number of the syllabus is listed on your
Programme of Study.To prepare for this section of your course, please read about Macroeconomics in the following resources:
WATCH - Introduction to Macroeconomics (Crash Course Economics)Links to an external site.WATCH - Aggregate Demand and Supply (Khan Academy) Links to an external site.WATCH - AD and AS (YouTube)Links to an external site.READ - Aggregate Demand and SupplyDownload READ - Aggregate Demand and SupplyTopicsThis Module is made up of 5 Topics:
Topic One (5.1): The Role of GovernmentTopic Two (5.2): Macroeconomic Aims of GovernmentTopic Three (5.3): Fiscal PolicyTopic Four (5.4): Monetary PolicyTopic Five (5.5): Supply-side PolicyTopic One (5.1): The Role of Government
In this topic you will study the following:
- Government roles at local, national and international level.
ReadingFor this topic you will need to work through pages124 to 125 in your course book.
Key Points- Please pay attention to the various roles that governments play in different countries.
- You will need to understand that in all countries the government is an employer, whereas their role as a producer can be very different from one country to another. Think about your country, what role does the government play there?
LinksPlease study the following resource for further information on the role of government:
EXPLORE - Role of Government in Economics (BBC)Topic Two (5.2): Macroeconomic Aims of Government
In this topic you will study the following:
- The five main macroeconomic aims of government.
- Conflicts that can arise in pursuing these aims.
ReadingFor this topic you will need to work through pages 126 to 129 in your course book.
Key Points- Please pay attention to the fact that governments in all countries have similar macroeconomic aims, although the priorities may be different from one country to another.
- You will need to understand the common objectives of full employment, stable prices, economic growth, fair income distribution and international trade, and why these are priorities.
- You will also learn that when pursuing these aims, there may be times when conflicts between them arise, and trade-offs will need to be accepted.
Please study the following resources:
LinksWATCH - Macroeconomic Government Objectives (YouTube)Links to an external site. DownloadREAD - Macroeconomic Policy ObjectivesTopic Three (5.3): Fiscal Policy
In this topic you will study the following:
- Elements of fiscal policy.
- Types of taxes and reasons for taxation.
- Types and effects of fiscal policy.
ReadingFor this topic you will need to work through pages 130 to 137 in your course book.
Key Points- Please pay attention to the different policies that a government can use to meet the objectives of full employment, stable prices, economic growth, fair income distribution and international trade, which were introduced earlier.
- Government policies are split into fiscal, monetary and supply-side policies.
- You will need to understand that fiscal policies are set out in the budget and involve the use of taxation and government
- In addition, you will learn about the different types of taxation.
- Finally, types of fiscal policy are examined and the outcomes that they bring.
LinksPlease watch the following video:
WATCH - Fiscal Policy (YouTube)Topic Four (5.4): Monetary Policy
In this topic you will study the following:
- Types and uses of monetary policy.
ReadingFor this topic you will need to work through pages 138 to139 in your course book.
Key Points- Please pay attention to the different policies that a government can use to meet the objectives of full employment, stable prices, economic growth, fair income distribution and international trade, which were introduced earlier.
- Government policies are split into fiscal, monetary and supply-side policies.
- You will need to understand that monetary policy involves controlling the amount of money in an economy (money supply) and the price of money (interest rate).
LinksPlease watch the following video:
WATCH - Monetary Policy (YouTube)Links to an external site.Topic Five (5.5): Supply-side Policy
In this topic you will study the following:
- Supply-side measures and the effects of supply-side policy.
ReadingFor this topic you will need to work through pages 140 to 141 in your course book.
Key Points- Please pay attention to the different policies that a government can use to meet the objectives of full employment, stable prices, economic growth, fair income distribution and international trade, which were introduced earlier.
- Government policies are split into fiscal, monetary and supply-side policies.
- You will need to understand that supply side policy is designed to make an economy more efficient through such things as better education and healthcare.
QuizNow that you have completed all the topics, it is time to check your understanding by taking the
multiple-choice quiz. You must pass this quiz before moving on to the next Module. Remember you can do the quiz as many times as you want to practice and learn. Use it as an opportunity to test yourself!
AssignmentWhen you are fully prepared, feel confident with the material and have passed the quiz, you should complete
Assignment Five and submit it to your tutor via Canvas for marking and feedback.