Economy

• What is the role of the government in the economy?

  Measured by how it handles the economy
• How can elections affect the economy?

  Elections can weaken or strengthen the economy
• Who gets blamed when the economy performs poorly?

  The government is blamed rightly or wrongly
• Who are the main players in the economy?

  • The PM
  • The Treasury
  • The Chancellor of the Exchequer
  • Bank of England
  • Office for Budget Responsibility
• What does the term "inflation" refer to?

  Rise in prices of goods over 12 months
• What is a recession?

  Negative economic growth over 6 months
• What does the Treasury control?

  The nation's purse strings and finances
• What is Gross Domestic Product (GDP)?

  Value of goods produced by the UK
• What is the role of the Office for Budget Responsibility (OBR)?

  Provides independent economic data and assessments
• What is a deficit?

  Cash caused by government spending
• What is the Bank of England's status?

  Publicly owned but independent
• Who manages the money supply in the UK?

  The Governor of the Bank of England
• What does the Monetary Policy Committee do?

  Sets interest rates for the economy
• What is the role of the International Monetary Fund (IMF)?

  Promotes international financial stability and cooperation
• What are the main components of the budget?

  • Chancellor’s economic statement
  • Review of economic policy
  • Medium-term forecasts
  • Government spending plans
  • Taxation changes
• What are the two parts of the budget speech?

  Comment on economic situation and detailed measures
• What are direct taxes?

  • Income tax
  • Capital gains tax
  • National Insurance
  • Inheritance tax
  • Corporation tax
• What are indirect taxes?

  • VAT
  • Airport passenger tax
  • Customs and excise duties
  • Alcohol duties
• How does the government usually borrow money?

  By selling bonds to investors
• What is a potential problem with government bonds?

  Doubt about ability to repay the debt
• What do pension funds use to raise money?

  Bonds