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2.1 The measurement of macroeconomic performance

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Question 89

The table below shows different policy combinations involving changes to the central bank's interest rate and the government's structural budget deficit.

CombinationCentral bank interest rateStructural budget deficit
AIncreaseDecrease
BDecreaseDecrease
CDecreaseIncrease
DIncreaseIncrease

An economy is currently experiencing a significant negative output gap with high levels of cyclical unemployment. All other things being equal, which policy combination is most likely to successfully return the economy towards its trend level of real GDP?

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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