Table 1 shows four supply-side proposals. The government wants to raise long-run productive capacity and improve incentives to work, but it has little money for new spending.
| Proposal | Government cost | Likely effect on work incentives | Likely effect on skills |
|---|---|---|---|
| A | High | No change | Large rise |
| B | Low | Rise | Small rise |
| C | High | Fall | Large rise |
| D | Low | Fall | No change |
Which proposal best meets both aims?
Proposal A
Proposal B
Proposal C
Proposal D
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.