IGCSE Economics - Review

A government decides to increase the wages paid to the employees of state-owned enterprises. What will increase immediately, as a result of this decision?

• Government expenditure

• A budget surplus

• Unemployment

• Unsold goods and services

What type of product is education?

• An inessential good

• An inferior good

• A merit good

• A public good

In what type of economy, are most workers employed by the government?

• Free enterprise

• Market

• Mixed

• Planned

Which of the following is a macroeconomic aim of the government?

• A fall in national output

• High unemployment

• Imports exceeding exports

• Price stability

Which of the following could increase a country’s productive potential?

• An improvement in education

• A reduction in the retirement age

• Retention of worn out machinery by firms

• Migration of workers to other countries

which of the following is most likely to increase demand in the economy?

• A reduction in government expenditure

• A reduction in the rate of interest

• A rise in a budget surplus

• A rise in income tax

When does a budget deficit occur?

• When imports exceed exports

• When government expenditure is greater than government revenue

• When interest rates are falling

• When the money supply is rising

What is most likely to conflict with a government’s aim of full employment?

• Lower income tax

• Lower spending on imports

• Higher government expenditure

• Higher interest rate

What is most likely to happen due to economic growth?

• A fall in the standard of living

• A fall in the tax revenue

• A rise in employment

• A rise in government expenditure on unemployment benefits

What combination of macroeconomic aims is most likely to benefit from a decrease in government spending?

• A fall in imports and price stability

• Economic growth and full employment

• Full employment and a fall in imports

• Price stability and economic growth