The government transferred a state-owned freight operator to private ownership. Six years later, the following index values were recorded for the economy.
| Measure | Before the transfer | Six years later |
|---|---|---|
| Productive capacity | 100 | 112 |
| Total spending | 100 | 105 |
| Actual output | 100 | 105 |
Other government policies were introduced during the same period.
Which is the most accurate conclusion from the information?
The economy was operating close to its new productive capacity, since spending and output increased similarly
The transfer probably explains the increase in productive capacity, since actual output also increased
The transfer had a low opportunity cost, since spending rose by less than productive capacity
Productive capacity rose faster than spending and output, but the transfer's precise effect cannot be isolated
121 exam-style questions on OCR GCSE Economics 3.7 Supply side policies, covering 3.7.1 What are supply side policies and 3.7.2 Costs and benefits of supply side policies. Each one has a worked solution and a mark scheme showing where the marks go.