An economy is operating with a significant negative output gap. Which of the following measures represents a discretionary expansionary fiscal policy?
A reduction in the main rate of Corporation Tax combined with an increase in capital expenditure on transport infrastructure
An automatic increase in total government expenditure on unemployment benefits during an economic downturn
A decision by the central bank to lower the policy interest rate and expand its quantitative easing programme
A relaxation of planning regulations to encourage private sector investment in commercial property
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.