Moldova has the lowest-income economy in Europe, and many of its citizens live in poverty. The economy is based mainly on agriculture, with many small farms. Its retail outlets are also small. The government has used a variety of policies, including supply-side policy, to improve economic performance. This has largely worked. For example, unemployment has fallen.
(a)[2]
Identify two different supply-side policy measures.
(b)[4]
Explain two methods a government could use to reduce relative poverty.
(c)[6]
Analyse the reasons that may make small shops easy to establish.
(d)[8]
Discuss whether firms will benefit, or not, from a fall in unemployment.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Reduction in income tax” …