IGCSE Economics - Macroeconomics 2

Supply Side Policy is

• designed to increase aggregate supply and hence increase productive potential

• implement an expansionary fiscal policy.

• reducing taxes to spend more on goods and services.

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

• Lower-income tax

• Lower spending on import

• Higher government expenditure

• Higher interest rates

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

Which of the following is a supply-side policy measure?

• A decrease in government spending on education

• A decrease in government spending on healthcare

• An increase in corporation tax

• An increase in the threshold at which people pay income tax

When is the best time to use monetary Policy?

• When economic goes overheat

• When economic growth too low

• When recession happen

What is monetary policy was targeted?

• To have no inflation in the economy

• To have 2% inflation in the economy

• To have 5% inflation in the economy

• To have 10% inflation in the economy

Which is the negative effect of Privatisation?

• detrimental to the company

• There is the risk that the firms may become dependent on the subsidies.

• A Monopoly may develop

• decrease in import

Why does more emphasis on education and training lead to an increase in national output?

• It improves the productivity of the labour force.

• It lowers the inputs of capital investment.

• It reduces demands for higher pay.

• It reduces the power of trade unions.

Supply-siders generally favor _______.

• tax increases

• decreases in demand

• deregulation

• government intervention

The objective of supply-side policies is to:

• increase potential output and achieve economic growth

• increase long-run aggregate supply and full employment output

• stimulate the supply side of the economy to achieve economic growth

• all of the above