FISCAL POLICY

Date: 2015-10-07; view: 1955.

Reading 1

UNIT 14

A Vocabulary

Choose the correct answer A, B or C from the list below.

1 The … department of the government looks after roads, railways and airports.

2 The government hopes its … will help reduce unemployment.

3 The parts that something is made of is sometimes called … .

4 … employment is when everyone who can work has a job.

5 The money that you have after you've paid taxes is called your … income.

6 The part of a person's salary that is not taxed is called his personal … .

7 The government plans many new … projects, such as building new hospitals and schools.

8 Another word for extra goods that are not needed is … .

9 When the economy is working at full …, it is using all its resources for production.

10 A … is a large, fast road which connects cities.

11 A … is a plan for achieving something.

12 In a … tax system, people who earn more pay more tax than people who earn less.

1 A transport B education C defence

2 A components B allowance C policy

3 A income B components C capacity

4 A absolute B complete C full

5 A full B disposable C spending

6 A allowance B surplus C capacity

7 A personal B public C disposable

8 A surplus B shortage C allowance

9 A employment B income C capacity

10 A path B motorway C railway

11 A component B project C scheme

12 A surplus B progressive C public

Fiscal policy is one of the tools that governments have to keep the economy on a steady path. The two main components of fiscal policy are changes to the tax system and changes in government spending. But what changes can governments make in these two areas, and how do changes affect the growth of the economy?

Let's look first at the tax system, and in particular at income tax. Income tax is one of the biggest sources of income for a government. Many

B Comprehension

Now read the text again and answer the questions.

1 What are the two tools of fiscal policy?

2 What is someone's personal allowance?

3 What will the government do to taxes if the economy is slowing down?

4 How can the government create more demand in the economy?

5 When does the multiplier effect stop working?

D Vocabulary

Complete each sentence with the following words or phrase:

central bank, commercial banks, confident, credit, exchange rate, expand, frequently, impact, mortgage, proportion, repayments

1 We have to pay our bills too … in my opinion!

2 A country's … is the government bank.

3 The … are the high street banks that everyone uses.

4 When a loan is taken out, usually each month … have to be made.

5 A … is a special loan for people who want to buy a house.

6 When you feel …, you feel sure that what you are doing is safe.

7 Many people these days buy things on … instead of paying in cash.

8 A large … of people use banks to deposit their savings.

9 The … compares the values of different currencies.

10 If a company wants to …, to move into new markets for example, it will need to borrow money.

11 High interest rates have an … on the customer's ability to buy a new home.