Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

(a)[2]

The data refers to a ‘government ..... budget deficit’. Explain what this means.

(b)[4]

Use Fig. 1 to judge whether there is a connection between the size of the budget deficit and economic growth.

(c)[4]

Explain how the falling value of some countries’ currencies ‘stimulated international demand for their tradable goods, resulting in manufacturing growth.’

(d)[10]

Use the evidence provided to discuss the similarities and differences in the two opinions and judge which one you think is more suitable for overcoming a recession.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: Recognise that the article is about a government budget deficit rather than a personal budget.

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