Greater government expenditure creates opportunity costs. This was one of the issues confronting the president of France in 2017. After coming to power, he has concentrated on supply-side policy measures rather than monetary policy. Trade union membership in France has fallen in recent years.
(a)[2]
Define what is meant by monetary policy.
(b)[4]
Explain, using an example, the effect of opportunity cost on government decision-making.
(c)[6]
Analyse the reasons why trade union membership has fallen in some countries.
(d)[8]
Discuss whether supply-side policy measures always lead to economic growth.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Regulation of money supply, interest or exchange rates to influence demand/inflation” …