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2.5 Fiscal policy and supply-side policies

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Question 57

During a severe economic downturn, the Republic of Altera experiences a sharp fall in national income. Without any new legislative changes to tax rates or benefit levels, the government's total tax revenues fall from $180 billion to $155 billion, while its expenditure on unemployment benefits increases from $12 billion to $18 billion.

These changes in Altera's government budget are best classified as the operation of:

A

discretionary expansionary fiscal policy.

B

contractionary monetary policy.

C

automatic stabilizers.

D

supply-side structural reforms.

Markscheme

2.5 Fiscal policy and supply-side policies Questions

  1. A Level
  2. /Economics
  3. /2.5 Fiscal policy and supply-side policies

245 exam-style questions on AQA A Level Economics 2.5 Fiscal policy and supply-side policies, covering 2.5.1 Fiscal policy and 2.5.2 Supply-side policies. Each one has a worked solution and a mark scheme showing where the marks go.

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