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Section 8
) for managing the 
economy and the role of fiscal policy (
Section 9
) in affecting demand 
and examine the types of taxation and the role of taxation in creating 
incentives. This is followed by a discussion of the conduct of 
monetary policy (
Section 10
). 
The balance of payments (
Section 11
) is a statistical 'accounting' 
record of a country's international trade transactions (the purchase and 
sale of goods and services) and capital transactions (the acquisition and 
disposal of assets and liabilities) with other countries during a period of 
time.
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PART A: THE BUSINESS ORGANISATION, ITS STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT 
 
58
 
Study Guide 
Intellectual level
 A4 
Macro-economic 
factors 
 
 
(a) Define macroeconomic policy and explain its objectives. 
K 
(b) Explain the main determinants of the level of business activity 
in the economy and how variations in the level of business 
activity affect individuals, households and businesses. 
K 
(c) Explain the impact of economic issues on the individual, the 
household and the business: 
K 
(i) Inflation 
(ii) Unemployment 
(iii) Stagnation 
(iv) International payments disequilibrium 
(d) Describe the main types of economic policy that may be 
implemented by government and supra-national bodies to 
maximise economic welfare. 
K 
(e) Recognise the impact of fiscal and monetary policy measures 
on the individual, the household and businesses. 
K 
 
1
The structure and objectives of the economy 
Macroeconomics 
is the study of the aggregated effects of the decisions of individual economic units 
(such as households or businesses). It looks at a complete national economy, or the international 
economic system as a whole.