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A-LevelEconomicsGovernment macroeconomic intervention9708/32 · Oct/Nov 2017 · Q281 Mark

The government cuts taxes and increases its spending in order to create jobs during a recession. When will a resulting budget deficit be least likely to cause a permanent reduction in unemployment? A when households expect higher inflation rates in the future B when households spend their extra disposable incomes on domestic products C when the government's extra spending is on new infra-structure projects D when the government's extra spending is on the salaries of public sector workers

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

  1. [1] A

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About this question

Topic
Government macroeconomic intervention, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source
A-Level Economics, Oct/Nov 2017 Paper 3 Variant 2, question 28.

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