In autumn 2023, the government of a major developed nation announced a fiscal consolidation plan aimed at reducing its structural budget deficit, relying heavily on capping public sector investment and freezing welfare benefits. Some critics argue that these expenditure cuts will disproportionately harm lower-income households and lead to a significant negative multiplier effect on real GDP.
Evaluate the view that cutting government spending is a more effective method of reducing a budget deficit than raising taxation.
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.