An economy is experiencing both a long-term decline in productivity growth and rising structural unemployment. Which of the following government policies is most likely to achieve a long-run supply-side improvement that directly addresses both of these issues?
A reduction in the central bank base interest rate to lower the borrowing costs for expanding commercial enterprises.
An increase in the level of unemployment benefits to support the disposable incomes of job-seekers in depressed regions.
The provision of targeted government grants for vocational retraining of workers displaced from declining industrial sectors.
The imposition of higher tariffs on imported capital equipment to protect domestic machinery manufacturers from foreign competition.
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.