5.1.1.3 - Stabilisation Function of Government Budget
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Practice Questions
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What is the stabilisation function of the government budget?
💡 Hint: Think about how government affects income and employment.
What happens when aggregate demand falls below supply?
💡 Hint: Consider the effects of an economic downturn.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the role of the stabilisation function?
💡 Hint: Think about the main goals of government budgets.
True or False: Increasing government spending can help reduce unemployment.
💡 Hint: Consider the concept of aggregate demand.
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Challenge Problems
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Critically analyze the potential impact of government intervention during a recession. What are the pros and cons?
💡 Hint: Consider both short-term benefits and long-term consequences.
Propose a fiscal policy to tackle persistent inflation without causing an economic slowdown. Justify your recommendation.
💡 Hint: Think carefully about how to balance competing economic goals.
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