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2.3 How the government manages the economy

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Question 5

A rise in interest rates causes firms to cancel investment projects. Which longer causal chain is most likely, other things remaining equal?

[1]
A

Lower investment, slower growth of productive capacity, weaker future economic growth

B

Lower investment, stronger growth of productive capacity, higher future inflation

C

More investment, slower growth of productive capacity, weaker future economic growth

D

More investment, stronger growth of productive capacity, weaker future economic growth

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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