Definition of Balanced budget: When total government spending equals government tax receipts. A budget surplus when spending is less than revenue is also considered a balanced budget. Usually, governments have a political incentive to spend more money than they actually have. This leads to a budget deficit because they need to borrow from the private …
Definition of balanced growth: Balanced growth refers to a specific type of economic growth that is sustainable in the long term. It is sustainable in terms of low inflation, the environment and balance between different sectors of the economy such as exports and retail spending. Balanced growth is the opposite of volatile boom and bust economic …
This is a scheme run by either a government agency or a private company which aims to insure the deposits of private investors in case a bank goes bankrupt. The advantage of deposit insurance schemes is that they can prevent individuals and firms from losing their savings. Also, the security of having deposits insured prevents …
This is when governments give a guarantee to savers that if their bank goes bankrupt, the government will pay them all or some of their savings. The government offers bank deposit protection to increase the confidence in the banking system. If people felt banks could go bankrupt during a financial crisis – then they could …
A bank loan is when a bank offers to lend money to consumers for a certain time period. As a condition of the bank loan, the borrower will need to pay a certain amount of interest per month, or per year. Secured Bank Loan. This is a loan which uses an asset as collateral. A …
A Bank Note is a piece of paper money which is issued by a bank. In the UK, all banknotes are issued by the Bank of England which is the legally recognised tender. History of Bank Notes Before the advent of banknotes, money had to have intrinsic value. For example, people would pay for things …
The Bank of England is responsible for managing UK monetary policy and maintaining the supply of money in the economy. The Bank of England is independent of the government. Although, the government can appoint members and set the inflation target. However, the Bank has a key role to play in the management of the economy …
The Bank of England is primarily responsible for managing the Money Supply and setting interest rates. In recent times the Bank has rarely tried to influence the exchange rate. Nevertheless the Bank of England are responsible for managing the UK’s foreign exchange reserves and could influence the exchange rate if policy warranted this. The Bank …