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 Fiscal Policy

Click to read the article below and then answer the questions:

Rishi Sunak has strong fiscal cards waiting to be played

Define Gross Domestic Product (GDP).

Distinguish between a budget deficit and the national debt.

With reference to the article, identify the approximate value of the UK’s GDP.

Explain how the government borrows when its tax receipts are insufficient to meet its planned expenditures.

Using an AD/AS diagram, analyse the potential impact of pandemic-related economic scarring on the real economy; ie unemployment, economic growth, inflation and trade.

Gavin Clarke, Emmanuel College