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2.5 Fiscal policy and supply-side policies

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Question 61

An economy is experiencing a significant negative output gap and rising cyclical unemployment. A government wishing to stimulate aggregate demand to close this gap through the use of discretionary fiscal policy would be most likely to

A

instruct the central bank to lower the main policy interest rate.

B

increase the target for the government's budget surplus.

C

reduce the rate of national insurance contributions, widening the budget deficit.

D

purchase government bonds from commercial banks to increase liquidity.

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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