A government aims to reduce its structural budget deficit. Which of the following represents a discretionary fiscal policy instrument that could be used to achieve this objective?
A reduction in the base interest rate to stimulate business investment and boost tax revenues
A decrease in spending on unemployment benefits resulting automatically from economic growth
An increase in the standard rate of Value Added Tax (VAT)
A central bank purchase of government bonds to reduce long-term interest rates
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.