The role of government

A government wants to attempt to make income distribution in the country more even. Which policy is most likely to bring this about?

May/June 2017

A government gave approval for a new railway line to be constructed between major cities. A private company would build it, although part of the financing would come from taxation. It would generate many jobs. Residents along the route were concerned about damage to their environment. Which concepts are directly involved in this statement?

May/June 2018

An increasing number of governments are levying taxes on unhealthy food and drinks. These taxes are generally regressive. Some of those governments are also boosting their healthcare spending. In other countries, healthcare is supplied by the private sector. The number of state-owned enterprises is falling in several countries because of privatisation.

May/June 2018

The diagram illustrates the demand curve $D_1$ and the supply curve $S_1$ for a good. The government puts in place a subsidy to encourage production. What will be the total cost of the subsidy to the government?

May/June 2019

Why may a government choose to subsidise a steel industry with high costs?

May/June 2019

Which activity is correctly matched with the organisation that offers it?

May/June 2022

The chart illustrates a government’s expenditure over one year. What was the total amount of government spending on public goods?

May/June 2022

Setting a highest allowed price for a good is an example of what kind of government policy?

May/June 2023

In 2020, Australia’s national minimum wage (NMW) was high. Some workers on Australian dairy farms received the NMW. Australia produces milk and soft drinks. Some people buy milk instead of soft drinks. During 2020, some dairy farms and some small firms closed down. In the same year, the value of the country’s floating foreign exchange rate increased.

May/June 2023

Which of the following is most likely to be a responsibility of a government?

Oct/Nov 2015

A government wants to reduce the difference between the incomes of the rich and the poor. What should it do in order to achieve this aim?

Oct/Nov 2015

The government of a wealthy country announced that it would provide its citizens with free food for one year. What effect would this policy have?

Oct/Nov 2015

A government chooses to transfer the monopoly supply of gas to households to a private firm. How might the government safeguard the interests of households after selling a large company to the private sector?

Oct/Nov 2016

The graph illustrates the percentage of income paid as tax. Which line shows a proportional tax?

Oct/Nov 2017

In 2015, Puerto Rico said it was thinking about removing some of its trade embargoes. At the same time, its government was re-examining how much it intended to spend. Incomes have been rising in Puerto Rico, although some workers have improved their position more than others. There have also been changes at the micro level, with the price elasticities of demand and supply shifting in some markets.

Oct/Nov 2017

Why are indirect taxes, such as VAT of $20\%$ on goods and services, considered regressive when high-income and low-income buyers are compared?

Oct/Nov 2019

In mixed economies, the government plays an important role. Which function would it not carry out?

Oct/Nov 2019

In May $2017$, olive oil prices increased by over $10\%$. This happened because a drought affected Greece, Italy, Spain and Tunisia, which are the main producing countries. World supply was predicted to drop by $14\%$ in $2017$. Demand for olive oil decreased in Europe, but it rose in several other countries, including Australia, Brazil and China. In some countries, certain staple foods, such as bread and rice, are taxed, while in other countries they are subsidised.

Oct/Nov 2019

Which responsibility is most likely to belong to a central government?

Oct/Nov 2020

Which duty is a central government most likely to be responsible for?

Oct/Nov 2020

The government of China is worried about how widespread poverty is and about the need for extra resources in the country’s low-income areas. Consequently, it is raising spending in these areas while cutting it in the high-income areas. Which economic concept is shown by this government policy?

Oct/Nov 2022

Which function is not carried out by a government?

Oct/Nov 2025