2.6.2 Demand side policies
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7 Terms
What is the role of demand side policies
Designed to influence the level of AD
What are the to types of demand side polices
Monetary and Fiscal
How is monetary policy used to manipulate AD
It is controlled by the B of E and they set the base rate (interest) and can undertake quantitive easing projects
How is fiscal ploy used to manipulate AD
it is controlled by the government and the treasury and they can choose to tax and spend at different levels
Show the impact of a successful demand side policy on lifting country out of recession on an AD/AS diagram
Show the effect of successful demand side policies through the trade cycle
The effect of successful demand side polices would be lower peaks and lower slumps and a more stable growth trend
How do successful demand side polices stabilise the overall trend growth
Through discretionary spending by taxing (withdrawal) in a boom and using that money to spend (injection) to boost ad in a recession means that trend growth his stabilised
Note 
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