Skip to content
MathsGenie logo
Open app

Course home

  1. A Level
  3. Economics AQA
  5. Question bank

2.5 Fiscal policy and supply-side policies

EasyMediumHard
1234567891011121314151617181920212223242526272829303132
Question 27

The diagram below shows the macroeconomic equilibrium of an economy.

Macroeconomic equilibrium

Which of the following combinations of fiscal policy changes is most likely to move the economy from its initial equilibrium at E1 E_1\,E1​ to a stable long-run equilibrium at E2E_2E2​?

An increase in government expenditure and a decrease in rates of direct taxation.

A decrease in government expenditure and an increase in rates of direct taxation.

A decrease in government expenditure and a decrease in rates of direct taxation.

An increase in government expenditure and an increase in rates of direct taxation.

2.5 Fiscal policy and supply-side policies Questions

  1. A Level
  2. /Economics
  3. /2.5 Fiscal policy and supply-side policies