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2.3 How the government manages the economy

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Question 7

A government decides to pay for extra repairs to schools and hospitals. Tax rates do not change.

What is the most likely immediate result for the economy?

[1]
A

Construction firms receive more revenue, but household incomes fall to match

B

Construction firms receive more revenue and take on more workers

C

Total spending in the economy falls, as the government has less money left

D

Total spending in the economy is unchanged, as no taxes have been cut

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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