CIE Econs IGCSE Macroeconomics 1

The diagram shows the percentage of income taken by a tax at different levels of income

What term is used to describe the tax?

• indirect

• progressive

• proportional

• regressive

Which statement about the meaning of government economic aims is correct?

• Economic growth means that a country’s real output must rise over time.

• Full employment means that no one must be unemployed.

• Price stability means that the price of all goods and services must remain unchanged.

• Redistribution of income means that everyone must have equal incomes.

The diagram shows the imposition of a tax of UZ on a good.

Which area shows the government’s tax revenue?

• TUEV

• TUEZY

• TUWV

• TUZY

A government decided to increase its spending on building schools and hospitals.

Which aim of government policy is most likely to be achieved by this increase?

• a balance of payments surplus

• a stronger exchange rate

• economic growth

• price stability

To make Gross Domestic Product a better measure of comparative living standards it needs to be adjusted by

• deducting the effects of exports and inflation

• deducting the effects of imports and exports.

• deducting the effects of population change and exports.

• deducting the effects of population change and inflation.

What is not involved in the construction of a retail price index?

• a base year

• a basket of goods

• the income tax rate

• the weighting of products

What is likely to fall when the rate of unemployment in a country falls?

• business confidence

• consumer spending

• government budget deficit

• government revenue from taxes

The table shows the percentage change in earnings and consumer prices for four countries for one year.

Which country will have experienced a constant level of real income during the year?

• A

• B

• C

• D

How would the proportions of different age groups in the population compare between low-income developing countries and high-income developed countries?

Low-income developing countries would have a

• higher proportion of the elderly and higher proportion of young people.

• higher proportion of the elderly and lower proportion of young people.

• lower proportion of the elderly and higher proportion of young people.

• lower proportion of the elderly and lower proportion of young people.

Which feature would be most helpful in identifying a typical developing country?

• the level of Gross Domestic Product

• the rate of rural to urban migration

• the size of geographical area

• the size of the population