Governments use fiscal policy to influence the economy.

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

1. Question 11(a)
2. Award 1 mark for identification of a fiscal policy tool (e.g., taxation, government spending) (K1)
3. Award 1 mark for an outline of the tool (App1)
4. Repeat for a second tool (K1, App1)
5. Example 1: Taxation (K1) / which is the compulsory charges levied by the government on individuals and firms (App1).
6. Example 2: Government spending (K1) / which is expenditure by the government on public goods and services, and welfare benefits (App1).
7. Question 11(b)
8. Award 1 mark for identifying an appropriate fiscal policy action (e.g., decrease taxes, increase government spending) (K1)
9. Award up to 3 marks for analysis of how it reduces unemployment (App1, An1, An1)
10. Example: A government could increase its spending (K1) / for example, on infrastructure projects or public services (App1). This direct spending creates jobs within these sectors (An1) and can also stimulate demand for goods and services from related businesses, leading to further job creation across the economy (An1).