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2.3 Economic performance

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Question 57

A government increases the rate of corporation tax on high-profit multinational firms and uses all of the additional tax revenue to subsidise vocational training programs for low-skilled workers. This policy successfully reduces structural unemployment and narrows wage differentials, but leads to a fall in foreign direct investment (FDI) and a reduction in long-run economic growth. This outcome is most likely to

A

result in a significant budget surplus and a falling national debt.

B

demonstrate a microeconomic benefit with no opportunity cost.

C

illustrate a clear conflict between macroeconomic policy objectives.

D

represent a purely contractionary monetary policy stance.

Markscheme

2.3 Economic performance Questions

  1. A Level
  2. /Economics
  3. /2.3 Economic performance

327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.

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