Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

When a government keeps tax rates and benefit rates unchanged in response to cyclical fluctuations in output, what is it aiming to achieve through this fiscal policy?

  • Ato allow automatic stabilisers to work
  • Bto keep output at the full employment level
  • Cto maintain a constant balanced budget
  • Dto ensure that its budget is in surplus over the trade cycle

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

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