A-LevelEconomicsGovernment Macroeconomic InterventionMay/June 2019Paper 1 Q191 Mark
A country has a fixed exchange rate. Which combination of problems would be most likely to cause the country's government to reduce taxation and lower interest rates?
Ademand inflation and a balance of payments current account deficit
Bdemand inflation and a low level of investments
Chigh unemployment and a balance of payments current account deficit
Dhigh unemployment and a low level of investment
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of government macroeconomic intervention within the Economicssyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
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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