Which one of the following is an example of a contractionary fiscal policy designed to curb aggregate demand while, at the same time, minimising any adverse impact on the economy's potential for long-run economic growth?
An increase in reserve requirements for commercial banks alongside a shift in taxation from wealth to consumption.
A decrease in the budget deficit achieved by cutting national research grants while decreasing VAT on green energy.
An increase in the government's budget surplus coupled with a reallocation of government spending from transfer payments to transport infrastructure projects.
A rise in the base interest rate combined with a transition from carbon taxes to income 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.