Government spending and tax revenue both rise by £30 billion. Which statement is correct?
The budget balance must improve by £60 billion
The budget must move into deficit
The direct effect on the budget balance is zero, although the economic effects may differ
Fiscal policy has not changed because tax and spending moved together
30 exam-style questions on OCR GCSE Economics 3.5 Fiscal policy, covering 3.5.1 Government spending and revenue, 3.5.2 Budget balance, surplus and deficit, 3.5.3 What is fiscal policy, 3.5.4 Calculate effects of taxes and spending, 3.5.5 Analyse effects of taxes and spending, 3.5.6 Costs and benefits of fiscal policy, and 3.5.7 Redistributing income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.