Which of the following actions represents a contractionary fiscal policy designed to curb aggregate demand while minimising any adverse impact on the economy's long-run aggregate supply (LRAS)?
An increase in the base interest rate by the central bank, alongside a reduction in welfare benefits.
A reduction in the budget deficit achieved by cutting national transport infrastructure projects while lowering the rate of corporation tax.
A transition towards a budget surplus achieved by reducing government spending on administrative public sector wages while expanding tax allowances for business investment in new machinery.
An increase in the commercial bank reserve ratio, combined with a shift in the tax burden from indirect taxes to direct taxes.
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.