Which of the following can the government not use directly to control the economy ?
Correct answer: A. Pay rates within the private sector
- A. Pay rates within the private sector
- B. pay rates in the public sector
- C. investment in education
- D. Benefits available for the unemployed and sick
Explanation
The government can directly set public-sector pay, provide benefits and fund education, but private-sector pay is normally determined by employers and workers through the labour market. It may influence private wages indirectly through laws or taxation, but cannot set them directly.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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