In which one of the following economic situations is a government most likely to introduce a contractionary fiscal policy?
The economy is experiencing a widening negative output gap.
Cyclical unemployment is rising due to a fall in consumer confidence.
Demand-pull inflation is rising significantly above the target rate.
The long-run trend rate of economic growth has begun to decline.
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.