section 2 topic 3 , 4 and 5

What are the four main government economic objectives?

Economic growth, low inflation, full employment, favourable balance of payments.

Why is economic growth important to businesses?

It means improving living standards, so consumers have more money to spend on goods and services.

How does high inflation affect businesses?

It creates uncertainty, increases production costs, reduces profits, lowers demand, and damages international trade.

What is monetary policy?

Government policy involving changes to the amount of money in the economy and the cost of borrowing (interest rates).