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2.6 Macroeconomic objectives and policies

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Question 2

An economy is experiencing low productivity growth and persistent structural unemployment. The government proposes four policy measures to address these issues:

  1. Abolishing national minimum wage regulations to improve labor market flexibility.
  2. Direct state funding for a new national artificial intelligence research institute.
  3. Reducing the rate of capital gains tax to incentivise private enterprise investment.
  4. Lowering the central bank's reserve requirement ratio to boost commercial bank lending.

Which of these measures are classified as market-based supply-side policies?

A

1 and 3 only

B

1 and 2 only

C

2 and 3 only

D

1, 3 and 4 only

Markscheme

2.6 Macroeconomic objectives and policies Questions

  1. A Level
  2. /Economics
  3. /2.6 Macroeconomic objectives and policies

52 exam-style questions on Edexcel A A Level Economics 2.6 Macroeconomic objectives and policies, covering 2.6.1 Possible macroeconomic objectives, 2.6.2 Demand-side policies, 2.6.3 Supply-side policies, and 2.6.4 Conflicts and trade-offs between objectives and policies. Each one has a worked solution and a mark scheme showing where the marks go.

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