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2.1 The measurement of macroeconomic performance

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Question 43

The table below shows different combinations of changes in the central bank's rate of interest and the government's budget balance. An economy is currently experiencing an overheating phase with a positive output gap. All other things being equal, which one of the policy combinations is most likely to successfully reduce the economy's positive output gap?

CombinationRate of interestGovernment's budget balance
ADecreaseIncrease in deficit
BIncreaseIncrease in surplus
CDecreaseIncrease in surplus
DIncreaseIncrease in deficit
A

Combination A

B

Combination B

C

Combination C

D

Combination D

Markscheme

2.1 The measurement of macroeconomic performance Questions

  1. A Level
  2. /Economics
  3. /2.1 The measurement of macroeconomic performance

187 exam-style questions on AQA A Level Economics 2.1 The measurement of macroeconomic performance, covering 2.1.1 The objectives of government economic policy, 2.1.2 Macroeconomic indicators, 2.1.3 Uses of index numbers, and 2.1.4 Uses of national income data (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.

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