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2.3 How the government manages the economy

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Question 37

A government ends its contracts with the private catering firms that supply meals to its offices, so that it can spend less. Tax rates do not change.

How is this decision likely to affect the economy at first?

[1]
A

Catering firms receive less revenue, so they cut jobs and incomes fall

B

Catering firms receive less revenue, but their workers' incomes are unaffected

C

Total spending in the economy rises, as the government is saving money

D

Total spending in the economy is unchanged, as only government spending fell

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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