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Fiscal policy

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Question 6

To address a widening structural budget deficit while protecting low-income households during a cost-of-living crisis, a government proposes a fiscal policy package:

  1. Increase the tax-free personal allowance from £12,500 to £16,000.
  2. Raise the basic rate of income tax from 20% to 24% (applicable on income above the personal allowance up to the higher-rate threshold).

Evaluate, with the use of one or more appropriate diagrams, whether a nation's macroeconomic performance would be enhanced by implementing this fiscal policy package.

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Markscheme

Fiscal policy Questions

  1. A Level
  2. /Economics
  3. /Fiscal policy

68 exam-style questions on OCR A Level Economics Fiscal policy. Each one has a worked solution and a mark scheme showing where the marks go.

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