Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

(a)[8]

Using an AD/AS diagram, explain what is meant by an expansionary fiscal policy and assess how far an expansionary fiscal policy will always raise the level of aggregate demand.

(b)[12]

Assess how far supply-side policy is the most effective way to reduce the inflation rate.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Expansionary fiscal policy defined as a rise in government spending and/or a reduction in tax rates” …

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI