Economics 0455 · IGCSE · The nature of the economic problem
The nature of the economic problem — practice question
The economic problem means that people are forced to make choices. In Bulgaria, over the past few years, spending patterns have changed. The Bulgarian government wants people to spend more, and it is trying to prevent deflation from returning while also making sure the country continues to see output growth.
(a)[2]
Identify two policies a government could use to make people spend more.
(b)[4]
Explain how the economic problem makes people need to make choices.
(c)[6]
Analyse why deflation can lead to a drop in output.
(d)[8]
Discuss whether a country will experience harm if its output falls.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Cut taxes” …