WHSS Economics: Policies

The government wishes to increase economic growth in its economy. What would not be likely to achieve this aim?

A The central bank encourages bank lending.

B The central bank lowers interest rates.

C The government increases sales tax (VAT).

D The government subsidises new industries.

• A

• B

• C

• D

The government redistributes income more evenly. What is most likely to increase?

A the incentive to work

B the level of savings

C the need for welfare payments

D the rate of inflation

• A

• B

• C

• D

On a holiday island criminals have frightened away tourists. To give tourists confidence the government has increased the number of police. What is likely to happen as a result of such action by the government?

A Overseas earnings fall.

B Public expenditure increases.

C Taxes fall.

D Unemployment increases.

• A

• B

• C

• D

What is a direct tax?

A a tax on electricity

B a tax on imported goods

C a tax on services

D a tax on income and wealth

• A

• B

• C

• D

A government achieves a high rate of economic growth. How may this conflict with other government aims?

A It may increase government income.

B It may increase incomes for the lower paid.

C It may increase the supply of exports.

D It may increase the volume of imports.

• A

• B

• C

• D

The directors of a firm have to discuss the following topics. Which topic is least likely to be directly affected by the government’s influence on the firm?

A health and safety laws

B the interest it pays on borrowed money

C the minimum wage it must pay its workers

D the replacement of the director of finance

• A

• B

• C

• D

Between 2002 and 2007, approximately 18 million Latin American households moved out of poverty. Which change in the region is most likely to have caused this fall in poverty?

A an increase in economic growth

B an increase in inflation

C a reduction in employment

D a reduction in exports

• A

• B

• C

• D

One way in which a government may seek to increase geographical mobility of labour is by

A controlling firms locating in areas of low employment.

B giving grants to firms moving into areas of high unemployment.

C providing relocation expenses for workers.

D subsidising declining industries.

• A

• B

• C

• D

The retail price index of a country rose during a year from 200 to 240. What was the annual rate of inflation?

A 20%

B 40%

C 240%

D 440%

• A

• B

• C

• D

What is likely to happen in an economy that experiences uncontrolled hyperinflation?

A Economic activity will cease.

B Inequality of income and wealth will cease.

C Internal trade will cease.

D Trust in money will cease.

• A

• B

• C

• D