Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

(a)[3]

State what is meant by ‘a recession’ in economics.

(b)[5]

Analyse why governments borrow and why it is said that a government should increase spending in a recession.

(c)[6]

Consider the meaning of the phrase ‘government borrowing could ‘crowd out’ the private sector.’

(d)[6]

Assess whether the evidence in the article provides a conclusive case that the high level of government borrowing is an effective policy.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: Recession is associated with GDP

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