Economics 9708 · AS & A Level
Supply-side policy
100 practice questions on Supply-side policy, with worked solutions and instant marking.
Explain two factors that are likely to make the supply of a product relatively price-inelastic.
Feb/March 2016
Which option is not a supply-side policy measure?
Feb/March 2016
What factors would stimulate industrial growth in an area with high unemployment?
Feb/March 2017
The information is about supply-side policies. Explain, with two examples, what is meant by supply-side policies.
Feb/March 2017
Explain how economists assess the extent to which the supply of a good responds when its price changes. Explain two factors that affect the result.
Feb/March 2018
Explain the difference between autonomous investment and induced investment. Consider whether there is a link between these two types of investment.
Feb/March 2018
A government is dealing with increasing inflation. It wants to curb inflationary pressure without causing output to fall. Which action is most likely to achieve this?
Feb/March 2019
Which factor is most likely to make the greatest contribution to sustainable economic growth in a developed economy?
Feb/March 2020
Which macroeconomic policy is most likely to be used as a long-term way of reducing inflationary pressures?
Feb/March 2020
Using a diagram, explain the Laffer Curve analysis and assess how it is linked to supply-side policies.
Feb/March 2020
A government uses public funds to construct more schools. How would this be classified? (columns: fiscal policy; supply-side policy; monetary policy)
Feb/March 2021
Use production possibility curve (PPC) diagrams to illustrate the effect on an economy’s output of
Feb/March 2021
The diagram presents Lorenz curves for a developed economy. Which combination of supply-side policies would move the Lorenz curve from X to Y?
Feb/March 2021
A government is confronting increasing inflation. It wants to bring down inflationary pressure without causing output to decline. Which action is most likely to satisfy its requirements?
Feb/March 2023
In what present economic circumstances are supply-side policy measures most likely to help a country meet its main macroeconomic objectives?
Feb/March 2023
What is most likely to encourage dynamic efficiency?
Feb/March 2023
What may be regarded as an expansionary supply-side policy?
Feb/March 2024
Which set of factors is most likely to cause structural unemployment to decrease?
Feb/March 2024
In a country where most raw materials used as factor inputs are imported, which policy would be most likely to keep cost-push inflation under control?
Feb/March 2024
Using a diagram, assess how effective government policies may be in reducing cost-push inflation.
Feb/March 2024
A government reduces income tax. Why could this be regarded as a supply-side policy?
Feb/March 2025
A government chooses supply-side policy to raise long-run aggregate supply (LRAS). Why is it most likely that this policy instrument will not cause the price level to decrease?
Feb/March 2025
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.
Feb/March 2025
Which policy might raise economic growth without leading to inflation?
Feb/March 2025
The diagram illustrates the link between the rate at which wages rise and the unemployment rate. Which change would be expected to make the curve in the diagram move downwards and to the left?
May/June 2010
The diagram illustrates the link between the rate of increase in wages and the rate of unemployment. What is likely to make the curve in the diagram move downwards and to the left?
May/June 2010
Which policy measure would be regarded as a supply side policy measure?
May/June 2011
Which policy measure would be regarded as a supply-side policy?
May/June 2011
What would count as a supply side policy measure?
May/June 2011
The main objective of a government is to cut the natural rate of unemployment (NAIRU). Which policy would be most likely to help achieve this objective?
May/June 2012
Which factor is most likely to reduce a country's national output in the short term while raising its potential for long-term growth?
May/June 2012
Which policy would be most likely to help a government lower the natural rate of unemployment (NAIRU), given that this is its main objective?
May/June 2012
Changes in the law that have limited the influence of trade unions have, in many countries, lowered inflationary pressure. Which policy does this illustrate?
May/June 2013
Which policy is intended specifically to lower the amount of structural unemployment?
May/June 2013
Which measure would be most likely to encourage long-run growth in an economy?
May/June 2013
What is the principal aim of supply side policies?
May/June 2013
In many countries, legal changes that have reduced the power of trade unions have also lessened inflationary pressures. Which policy does this illustrate?
May/June 2013
Explain whether you would expect the price elasticity of supply of an agricultural product, such as rice, in a market to be elastic or inelastic.
May/June 2014
Explain two factors that are likely to result in the supply of a product being relatively price inelastic.
May/June 2015
Which factor is most likely to reduce a country's national output in the short run, while increasing its potential for long-term growth?
May/June 2015
Which policy action would count as a supply-side policy measure?
May/June 2016
In the diagram, the economy first rests in equilibrium at point X. The government then implements a supply-side policy measure, causing the economy to shift to point Z. Which supply-side policy and response could account for this movement?
May/June 2016
What might be regarded as an expansionary supply-side policy?
May/June 2016
Using examples, explain the instruments of monetary policy and supply-side policy.
May/June 2016
What is the chief aim of supply-side policies?
May/June 2016
Explain how a fall in an economy’s foreign exchange rate can cause both cost-push and demand-pull inflation.
May/June 2017
Which mix of policy measures is most likely to lower unemployment?
May/June 2017
Which policy is specifically intended to lower the level of structural unemployment?
May/June 2017
In its 2016 budget statement, the South African government proposed stimulating business activity by removing regulations. It also said that government expenditure was expected to rise by 7.1%. The diagram illustrates aggregate demand (AD) and aggregate supply (AS) in the South African economy. X marks the initial equilibrium position. Which new equilibrium would follow from these changes?
May/June 2018
A government chooses to raise funds from the general public to pay for its additional spending on apprenticeship training schemes. Which kinds of macroeconomic policy are being applied?
May/June 2018
A government raises the basic income tax rate in order to fund extra spending on apprenticeships and training. Which kinds of macroeconomic policy are being used?
May/June 2018
Explain, using a demand and supply diagram, how the fall in the price of a barrel of oil helped to reduce the value of the rouble.
May/June 2018
Explain the different methods by which resources are allocated in a market economy and a mixed economy.
May/June 2018
Which policy is most likely to enable a developed economy to achieve all of its macroeconomic objectives?
May/June 2018
What would lead to an increase in the productivity of labour?
May/June 2018
Distinguish between structural and frictional unemployment. Consider which is likely to have the greater negative effect on an economy.
May/June 2018
In order to motivate people to work, a government raises the minimum income threshold at which income tax begins to be paid. Which kinds of macroeconomic policy are being used in this case?
May/June 2019
Which of the following is the most appropriate example of an expansionary supply-side policy?
May/June 2019
Which set of policies is most likely to raise output?
May/June 2019
Cyclical and structural unemployment are the two most prevalent forms of unemployment. Explain the causes of these types of unemployment and assess the effectiveness of government policies to reduce them.
May/June 2019
Calculate the percentage of Nigeria’s national output accounted for by Lagos.
May/June 2020
What does nudge theory mean?
May/June 2020
The diagram indicates that aggregate demand (AD) and aggregate supply (AS) are balanced at point X. Welfare payments rise and the government enhances industrial training. What will the new equilibrium be?
May/June 2021
Which pairing identifies a principal aim of supply-side policy and a measure used to reach this objective?
May/June 2021
Demand has shifted away from goods made by labour-intensive production methods towards similar goods made with high-technology production methods. As a result, overall unemployment has risen. What is the best policy to reduce this type of unemployment?
May/June 2022
The government’s chief economist states that raising the highest rate of income tax from 40% to 45% is expected to cut tax revenue by 2%. Which economic concept could account for this forecast?
May/June 2022
Demand has moved away from goods made by labour-intensive production methods towards similar goods made with high-technology production methods. As a result, total unemployment has risen. What policy would be most effective in reducing this kind of unemployment?
May/June 2022
Explain what is meant by productivity in this context.
May/June 2022
Keynesians maintain that raising budget deficits will tackle the problem of unemployment. Monetarists contend that supply side policies are more successful in reducing unemployment. Consider which view is more likely to be correct.
May/June 2022
In the diagram, where AD and LRAS meet at point X shows the present macroeconomic equilibrium. Which point might show the new equilibrium following the introduction of an increase in the retirement age?
May/June 2023
What would count as a supply-side policy measure?
May/June 2023
Supply-side policies may be used to reduce cost-push inflation. Which policy would be most effective in achieving this goal over the long run?
May/June 2023
Compare Nigeria's government budget balance in 2016 with that in 2020.
May/June 2023
A government wants to encourage growth in the economy’s fishing industry. Which policy is most likely to lead to sustainable growth in the fishing industry?
May/June 2023
Which factor would make a supply-side stimulus to the economy less effective?
May/June 2023
A government wants to promote growth in the economy’s fishing industry. Which policy would be most likely to produce sustainable growth in the fishing industry?
May/June 2023
Which factor would make a supply-side stimulus to the economy work less effectively?
May/June 2023
The diagrams illustrate a country’s aggregate demand (AD1) curve and aggregate supply (AS1) curve. Following the world economic downturn (2007–2008), some governments have lowered labour costs and kept interest rates constant. In what way would this probably be represented on a diagram?
May/June 2024
Which option is not a supply-side policy?
May/June 2024
Using a diagram, explain what is meant by the circular flow of income in an open economy and consider the extent to which it can explain economic growth in such an economy.
May/June 2024
Evaluate the likely impact of these policies on that government’s ability to control inflation.
May/June 2024
Which of the following is not an example of an expansionary supply-side policy?
May/June 2025
Which supply-side policy would promote the entry of new entrepreneurs?
May/June 2025
A country raises its expenditure on education and training. It finances this by cutting unemployment benefit payments and by increasing taxes on machinery imports. What is the most likely impact of these changes? (Effects on physical capital and human capital shown in options.)
May/June 2025
Which of the following is a correct statement about supply-side policies?
May/June 2025
Explain why spending on education and training is a supply-side policy, and consider why its effect on the general price level may vary in the short run and the long run.
May/June 2025
Evaluate how a country might raise its potential economic growth.
May/June 2025
Which policy would boost domestic production? A cut in which of the following?
Oct/Nov 2011
The diagram illustrates the link between the rate at which wages rise and the unemployment rate. What would be likely to make the curve in the diagram move downwards and to the left?
Oct/Nov 2013
Which item below is not a supply-side policy measure?
Oct/Nov 2013
Which policy would be most likely to enhance a country’s chances of attaining a higher long-run rate of growth?
Oct/Nov 2013
A country’s government wants to redirect demand from private consumption to investment and net exports. Which mix of policy measures would be most likely to help achieve this aim?
Oct/Nov 2013
What is most likely to raise a country’s long-run trend rate of growth?
Oct/Nov 2014
If the unemployment present in a country is considered to be mainly structural, which policy would be the most effective for the government to put into place?
Oct/Nov 2014
Explain what economic growth means.
Oct/Nov 2014
Which supply-side policy is most likely to lead to short-run growth in a country's aggregate supply?
Oct/Nov 2015
In some European countries, investment spending fell during 2011–2012. What could a government do to prevent this fall?
Oct/Nov 2015
What is likely to reduce a country’s actual output in the short run, yet raise the long-run growth rate of its potential output?
Oct/Nov 2015
A government intends to raise expenditure on education and training each year. Which diagram is most likely to show how this rise will affect the economy’s long-run output and price level?
Oct/Nov 2016
A government is dealing with increasing inflation. It wants to ease inflationary pressure without causing unemployment to increase. Which policy action is most likely to satisfy these aims?
Oct/Nov 2016