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2.5 Fiscal policy and supply-side policies

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Question 28

Which one of the following is an example of fiscal policy having a direct supply-side effect?

A

A reduction in the central bank base rate to lower the cost of borrowing for business investment.

B

A temporary reduction in the standard rate of Value Added Tax (VAT) to boost household consumption.

C

An increase in state funding for university research-and-development (R&D) hubs to enhance technological innovation and capacity.

D

A depreciation of the exchange rate to make domestic exports more competitive in international markets.

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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