Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

A government chooses to raise direct taxation. Which combination would best describe the effect of this policy on unemployment, economic growth and the balance of payments?

  • Aunemployment: improves; growth: improves; balance of payments: improves
  • Bunemployment: improves; growth: improves; balance of payments: worsens
  • Cunemployment: worsens; growth: worsens; balance of payments: improves
  • Dunemployment: worsens; growth: worsens; balance of payments: worsens

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