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2.5 Fiscal policy and supply-side policies

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Question 47

The government of a nation implements several fiscal policy measures during an economic downturn:

  1. A new flat-rate environmental levy on all single-use plastic packaging.
  2. A temporary 2% surcharge on corporate profits exceeding £50 £50\,£50 million.
  3. An automatic rise in government expenditure on Universal Credit due to increasing unemployment.
  4. A discretionary £10 £10\,£10 billion infrastructure investment program to stimulate aggregate demand.

Which of these measures represents an indirect tax and an automatic stabilizer respectively?

A

1 and 3

B

1 and 4

C

2 and 3

D

2 and 4

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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