1. ROLE OF THE GOVERNMENT

2. AIMS OF THE GOVERNMENT 1.Create Full Employment 2.Control Inflation
3.Achieve Equilibrium of Balance of Trade
4.Control Government Finances
5.Achieve a Just Social Policy
6.Provision of Adequate National Infrastructure
7.Achievement of National Growth
8.Regional Development
**usually asked when this section comes up**

3. Policies used by the Government
-Fiscal : expenditure & taxation
-Monetary : supply of money, interest rates & credit creation.
-Exchange rate : devaluing or revaluing the currency in terms of other currencies
-Direct intervention : setting up semi-state bodies to provide goods and services in the open market
-Deregulation : changing of laws and practices which are determined to competition.
-Prices & Income : gov implements price controls to freeze or limit wage increases
-Economic planning : consultations with social partners to achieve realistic economic targets

4. CREATE FULL EMPLOYMENT
Why??
Income for government
Less exp
Less social cost
More spending in economy
Note 0% employment in not achievable
How??
Fiscal: reduce tax to encourage spending
Monetary: reduce interest to encourage investment
Exchange rate: reduce value of currency to stimulate exports
Direct intervention: increase jobs in public sector

5. CONTROL INFLATION Why?? Stabilise cost of living
Prevent wage increases
Keep Irish industry competitive
How??
Fiscal: increase tax to reduce demand
Monetary: increase interest rates to decrease demand for loans
Price and incomes: impose wage freezes & impose price control orders

6. ACHIEVE EQULIBRIUM OF BALANCE OF TRADE
Why??
Keep the value of imports balanced
Exports equal to each other
Maintains employment, production & standards of living
How??
Fiscal: increase taxes to lower income-decreasing demand for imports
Monetary: increase interest rates on loans - less money available to be spent on imports
Exchange rate: devalue currency – cheaper exports and more expensive inports

7. CONTROL OF GOVERNMENT FINANCES
Why??
Reduce national debt
Reduce cost of servicing debt
Make better use of resources
Reduce taxes
Use surplus money to provide better services
How??
Fiscal: decrease exp & gov borrowing

8. ACHIEVE A JUST SOCIAL POLICY
Why??
Without infrastructure the provision of goods and services could not take place
How??
Fiscal: implement a progressive income tax policy & increase social welfare

9. THE PROVISION OF ADEQUATE NATIONAL INFRASTRUCTURE
Why??
Without infrastructure the provision of goods & services could not take place efficiently
How??
Direct intervention: co-operate with private enterprise in the provision of facilities such as telephone services
Fiscal: increase gov sending on infrastructure.eg. Schools & hospitals

10. REGIONAL DEVELOPMENT Why??
Ensure all regions of the country share in the wealth
All the population has an adequate infrastructure suited to their needs
How??
Fiscal: ensure the payment of higher grants to companies setting up in disadvantaged areas

11. ACHIEVEMENT OF ECONOMIC GROWTH
Why??
Economic growth is aimed at increasing the average income per head of the population
How??
Economic planning: negotiate with social partners to set up realistic targets for growth
Monetary: ensure that the money supply is adequate when needed

12. CONFLICTS BETWEEN GOVERNMENT AIMS
1. Full employment ~ control of inflation, balance of payments & control of gov finances
2. Control of gov finances ~ provision of infrastructure, just social policy &full employment
3. Economic growth~ just social policy & control of inflation
**usually asked when this section comes up**

13. NEW GOVERNMENT INVESTMENTS
New schools
Permission has been given by the government for the building of 40 new schools around the country.
New children’s hospital
A new children’s hospital will be built over the next few years.
*as a result of findings in the 2011 census.

14. PRIVATISATION= the sale of state owned companies to the private sector
Advantages
Raise money for the government
Many state bodies are supported by taxation, their sale will result in less need for higher taxation
Gives Irish people the opportunity to invest in the Irish economy.
Disadvantages
New companies could fall into foreign control
May reduce labour force
Could discontinue services to society that are non-profitable

15. Ensure continuity of essential services.
NATIONALISATION= the process of a national government acquiring the ownership of o private business/industry.
Advantages
Ensure continuity of essential services.

16. 100,000 new jobs by 2016
The Government has designed a plan to promote the creation of 100,000 jobs over the next four years.
The Action Plan for Jobs 2012  seeks to help companies expand their scope for exporting goods; provide credit to small and medium sized enterprises; improve competitiveness; and attract more international investment to Ireland
- A €150 million Development Capital Scheme which will offer supports for small and medium-sized businesses with the potential to create jobs that are struggling to access credit
- The extension of the corporation tax exemption for start-up companies until 2014

17. EXAM QUESTIONS 2010 higher level 2009 higher level 2008 higher
2011 ordinary
2008 ordinary level
2007 ordinary
2006 ordinary level
2004 ordinary

18. EXAM QUESTIONS CONTINUED
2009 higher level:‘The Irish government should encourage initiatives that will prevent further cost increases and in turn sustain employment in small firms’.Suggest with reasons two actions the government could take to improve the competitiveness of small firms.
Reduce the minimum wage
Reduce taxation
Develop infrastructure
Subsidies to firms 2