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2.3 How the government manages the economy

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Question 46

Adult education courses create positive externalities, so a government subsidises places on them.

Subsidy per placePlaces in each intakeIntakes each year
£4516,0005
a.

Calculate the government's total annual spending on the subsidy.

[2]
b.

Instead of paying for the subsidy, the government could use the same money to fund apprenticeship places, which cost £4,500 each a year.

Using your answer to (a), explain one cost to the government of choosing the adult education subsidy.

[2]
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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