Inflation is above the government's preferred rate, but unemployment is also rising. The government cuts VAT and increases healthcare spending. Which evaluation is best?
The measures must reduce both inflation and unemployment
The measures are monetary policy because they affect spending
The budget must move into surplus
The measures may support demand and employment, but could worsen inflation and the budget balance
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.