O-LevelEconomicsGovernment and the macroeconomy2281/11 · Oct/Nov 2011 · Q291 Mark
A government decides to subsidise a major industry that is making a loss and also reduce sales tax (VAT) to increase consumer demand. Which aim would these policies be likely to help and which aim would they be likely to hinder?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
Aaim policies would help: balance of payments surplus; aim policies would hinder: economic growth
Baim policies would help: economic growth; aim policies would hinder: full employment
Caim policies would help: full employment; aim policies would hinder: stable prices
Daim policies would help: stable prices; aim policies would hinder: economic growth
✓ Correct answer
C: aim policies would help: full employment; aim policies would hinder: stable prices
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill Government and the macroeconomy and see which topics are most likely to come up next.
Sign up free →