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2.3 How the government manages the economy

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Question 2

A government reduces the tax that firms pay on their profits. One firm affected is a bicycle-component maker.

Which is the intended way this tax cut could raise the maker's productive capacity?

[1]
A

It can reinvest more of its profit in new machinery and technology.

B

It sells more components because demand from its customers rises.

C

The government gains more tax revenue to spend on new roads and rail.

D

Its workers keep more of their pay, so they choose to work longer hours.

Markscheme

2.3 How the government manages the economy Questions

  1. GCSE
  2. /Economics
  3. /2.3 How the government manages the economy

104 exam-style questions on AQA GCSE Economics 2.3 How the government manages the economy, covering 2.3.1a Fiscal policy and income and expenditure, 2.3.1b Fiscal policy and government objectives, 2.3.1c The government budget, 2.3.2a The meaning of monetary policy, 2.3.2b Uses of monetary policy, 2.3.3a Supply-side policies and their trade-offs, 2.3.3b Using supply-side policies, and 2.3.4 Policies to correct positive and negative externalities. Each one has a worked solution and a mark scheme showing where the marks go.

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