Demand-side policies

Evaluate the possible conflicts between macroeconomic objectives when seeking to control inflation.

Evaluate macroeconomic policies that could be used to reduce a current account deficit. Refer to a country of your choice in your answer.

Case study · Ghana – cocoa and chocolate production

Evaluate the microeconomic and macroeconomic effects of high interest rates in Ghana, or another developing country of your choice.

Case study · UK monetary policy since the Global Financial Crisis of 2008

Evaluate whether expansionary demand-side policies lead to conflicts between macroeconomic objectives.

Case study · UK monetary policy since the Global Financial Crisis of 2008

Evaluate whether the MPC has been successful in meeting the UK’s macroeconomic objectives between 2008 and 2019.

Evaluate macroeconomic policies, apart from monetary policy, the UK government could use to reduce inflation.

Case study · The UK economy

Evaluate the likely microeconomic and macroeconomic effects of tax cuts in the UK.

Case study · UK balance of trade and inflation

Evaluate how interest rates are used to control UK inflation.

Case study · Sub-Saharan Africa – growth and development

Evaluate the microeconomic and macroeconomic effects of decreasing interest rates in Kenya, or another developing country of your choice.

Case study · UK investment and productivity

Evaluate the fiscal policies the UK Government could use if it believes that ‘the UK economy is likely to experience another recession’ (Extract A, lines 27–28).

Evaluate the effectiveness of quantitative easing during ‘a significant recession’.

Case study · The German economy

Evaluate the microeconomic and macroeconomic impacts of ‘a much more expansionary fiscal policy’ (Extract C line 23) on the German economy.

Case study · Turkey – an emerging economy

Evaluate the likely microeconomic and macroeconomic effects of a rise in interest rates in Turkey.

Case study · UK government budget and household consumption

Evaluate the likely macroeconomic effects of the UK government pursuing a policy of reducing its budget deficit.

Case study · UK inflation and economic growth

Evaluate the use of interest rate changes as a means of controlling UK inflation.

Case study · UK incomes, inflation and monetary policy

Evaluate whether the MPC has been successful in controlling the UK’s inflation rate since 2011.

Case study · UK incomes, inflation and monetary policy

Evaluate demand-side policy responses to the Global Financial Crisis of 2008.

Case study · The German economy

With reference to the information provided and your own knowledge, assess the likely macroeconomic effects of the German government’s budget deficit.

Case study · UK living standards and supply-side policies

With reference to the information provided, explain two factors that the Bank of England’s Monetary Policy Committee may have considered when changing the base interest rate.

Case study · UK living standards and supply-side policies

Discuss the likely macroeconomic effects of a decrease in government expenditure on the UK economy. Use an aggregate demand and aggregate supply diagram to support your answer.

Diagram needed. Open the original question paper for the diagram ↗

Case study · The UK economy

With reference to Figure 4 and Extract A, examine the likely impact of the ‘freeze in income tax thresholds’ (Extract A line 1) on aggregate demand.

Case study · The UK economy

With reference to Extract B, discuss the use of quantitative easing in preventing deflation.

Case study · UK monetary policy since the Global Financial Crisis of 2008

Discuss factors, apart from changes in real wages, which the MPC may have considered when changing the base interest rate.

Case study · UK government budget and household consumption

With reference to Figure 1, explain the term ‘balanced government budget’.

Case study · The Eurozone economy

Discuss the likely success of the ECB’s quantitative easing programme in moving Eurozone inflation closer to ‘the central bank’s ceiling of 2%’ (Extract A, line 17).

Case study · The Eurozone economy

Discuss ‘looser fiscal policy’ and ‘supply-side reforms’ (Extract A, lines 20 and 21) that may be used by governments of Eurozone countries to increase economic growth.

Case study · UK incomes, inflation and monetary policy

With reference to Extracts A and B and your own knowledge, discuss whether the MPC should be concerned about the risk of deflation in the UK economy.

Define the term ‘indirect tax’.

Annotate the aggregate demand (AD) and short-run aggregate supply (SRAS) diagram below to show the likely impact of a reduction in indirect tax on the equilibrium level of real output and the price level.

Diagram needed. Open the original question paper for the diagram ↗

Define the term ‘budget deficit’.

Using the above table, calculate the percentage decrease in budget deficit between March 2016 and March 2019. You are advised to show your working.

Draw an aggregate demand and aggregate supply diagram to illustrate the likely impact of an increase in the UK base interest rate on the average price level and real output.

Diagram needed. Open the original question paper for the diagram ↗

Total UK Government tax revenue for 2021–22: £820 billion. Total UK Government expenditure for 2021–22: £1 053 billion. Using these figures, explain the likely impact of the above data on the UK Government’s budget balance.

With reference to the chart above, explain the likely impact of a reduction in the base interest rate on UK investment.

Explain one likely impact of a decrease in the base interest rate on inflation.

Define the term ‘interest rate’.

Annotate the aggregate demand (AD) and short-run aggregate supply (SRAS) diagram below to show the possible impact of a rise in the base interest rate on the equilibrium level of real output and the price level.

Diagram needed. Open the original question paper for the diagram ↗

Draw an aggregate demand and aggregate supply diagram illustrating the likely impact of a rise in interest rates on the price level and real output.

Diagram needed. Open the original question paper for the diagram ↗

With reference to the chart above, explain one factor that the Monetary Policy Committee (MPC) of the Bank of England may have considered when reducing the base interest rate.

In 2016/17 total forecast UK government spending amounted to £772 billion and total forecast tax receipts amounted to £716 billion. Calculate forecast UK government spending on social protection as a percentage of total forecast UK government spending in 2016/17. You are advised to show your working.

Define the term ‘budget deficit’.

Annotate the aggregate demand and aggregate supply diagram below to show the likely impact of the increase in the personal allowance on the UK’s price level and real output.

Diagram needed. Open the original question paper for the diagram ↗

Define the term ‘direct tax’.

Which one of the following is an example of an indirect tax?

Which one of the following will most likely lead to a reduction in the budget deficit?

Which one of the following is the most likely impact of an increase in the base interest rate?

Which one of the following can be deduced from the above chart?

Which one of the following would be most likely to result from lower base interest rates?

Which one of the following is the most likely effect of this quantitative easing?

Which one of the following would be most likely to solve a negative output gap problem in a domestic economy? An increase in

Which one of the following demand-side policies best explains a rise in the base interest rate?

Which one of the following would be most likely to cause an increase in credit card lending?

If a government takes decisions to target a budget surplus, this is an example of:

Which one of the following is the most likely effect of the Bank of England’s quantitative easing?

Which one of the following is an example of a direct tax?