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2.5 Fiscal policy and supply-side policies

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Question 68

An economy is experiencing overheating, with demand-pull inflation rising to 7.2% and a widening fiscal deficit. Which of the following combinations of discretionary fiscal policy measures, A, B, C or D, is most likely to both curb inflation and improve the government's fiscal balance?

Government capital expenditureTransfer paymentsDirect tax rates
ADecreaseIncreaseDecrease
BDecreaseDecreaseIncrease
CIncreaseDecreaseDecrease
DIncreaseIncreaseIncrease
A

A

B

B

C

C

D

D

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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