A-LevelEconomicsMacroeconomic Objectives and Policies / Fiscal PolicyMay/June 2020Paper 1 Q241 Mark
The diagram shows an economy at full employment equilibrium. [Figure 24.1] Which short-run measures should the government take to maintain the economy's current equilibrium if there is an unexpected balance of trade surplus?
Ahigher government spending on education financed by an equal rise in direct taxation
Bhigher direct taxation with government spending unchanged to create a budget surplus
Chigher spending on infrastructure financed by a budget deficit
Dlower interest rates to promote investment spending in the private sector
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of macroeconomic objectives and policies / fiscal policy within the Economicssyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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