Aims of Economic Policy

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?ernment decided to increase its spending on building schools and hospitals.

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

• balance of payments surplus

• economic growth

• price stability

• stronger exchange rate

What is most likely to cause the government to have a budget surplus?

• an increase in exports

• an increase in unemployment

• a decrease in government spending

• a decrease in private sector investment

Which of the following government policies would lead to a more even distribution of income?

• allowing a balance of payments deficit

• a change in the rate of exchange

• control of lending by commercial banks

• expenditure on unemployment benefits

Which of the following is an aim of government policy?

• income tax

• interest rates

• stable prices

• unemployment

Which aim of government policy is most likely to be achieved by a decrease in government spending?

• economic growth

• equality of income

• full employment

• price stability

Which policy would be most likely to increase the number of people in employment?

• introducing a minimum wage

• introducing a sales tax

• reducing income tax

• reducing tariffs on imports

What is likely to be the main aim of a government policy that increases both progressive taxes and welfare payments?

• economic growth

• full employment

• price stability

• redistribution of income

Which government policy would best protect the environment?

• encouraging economic growth

• exploiting natural resources

• increasing tax on gasoline (petrol)

• removing controls on industry

What is likely to be a disadvantage of economic growth?

• Government tax revenue falls.

• Resources are used up.

• The level of unemployment rises.

• The standard of living of the population falls.

When is a government said to balance its budget?

• when all goods and services are taxed equally

• when economic growth is the same in all regions of the economy

• when total exports equal total imports

• when its total income equals its total expenditure