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2.5 Fiscal policy and supply-side policies

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Question 8

An economy currently has a deficit on the current account of its balance of payments and a high level of cyclical unemployment. The government decides to implement a large-scale expansionary fiscal stimulus package to boost employment.

All other things being equal, which one of the following combinations is most likely to occur in the short term?

A

Rate of inflation: Decreases; Real GDP: Increases; Current account deficit: Decreases

B

Rate of inflation: Increases; Real GDP: Increases; Current account deficit: Increases

C

Rate of inflation: Increases; Real GDP: Decreases; Current account deficit: Increases

D

Rate of inflation: Decreases; Real GDP: Decreases; Current account deficit: Decreases

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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