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2.5 Fiscal policy and supply-side policies

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Question 91

An economy is experiencing a widening negative output gap and a decline in business investment. Which of the following policies would be the most appropriate course of action to remedy this situation?

An increase in:

A

the base interest rate to encourage capital investment

B

the government budget surplus to improve business confidence

C

value-added tax (VAT) to stimulate consumer spending

D

government expenditure on infrastructure to boost aggregate demand

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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