Last
list of definitions for AS:
1. Administrative
barriers: It is where the paperwork is unnecessarily made more difficult than
it would otherwise be with the aim to discourage imports (expenditure switching)
2. Contractionary/
deflationary fiscal policy: A reduction of public sector spending or/ and
increase in taxation with the aim of reducing the AD and hence level of income
(expenditure dampening)
3. Contractionary/
deflationary monetary policy: An increase in the rate of interest with the aim
of reducing the aggregate demand and hence level of income (expenditure
dampening)
4. Expenditure
switching: A policy which attempts to bring about a change in the pattern of
demand in an economy by reducing the purchase of imports and increasing the
demand for exports
5.Expenditure
dampening: A policy which attempts to bring about a reduction in the level of
aggregate demand
6. Exchange
rate controls: These are restrictions on the buying and selling of foreign
currency and is put in place to make it more difficult to finance the purchase of
imported products (expenditure switching)
7. Embargoes:
Ban on imports from particular countries which can be applied to some products
or all usually for political and military rather than economic reasons
8. Interest
rate policy: The use of changes in interest rate to bring about particular
objectives such as influencing the exchange rate
9. Quota:
A limit on the imported products that are allowed to enter a country
(expenditure switching)
10. Subsidies:
A grant given by the government to producers with the intention of keeping
costs low so that local firms can gain artificial competitive edge, thus
allowing the demand for imports to fall while exports to increase (expenditure
switching)
11. Tariffs:
A charge levied by the government onto imported products with the intention of
making them artificially more expensive so that the people will reduce the demand
for the product (expenditure switching)
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