Cambridge IGCSE · Economics (0455)

The macroeconomic aims of government: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on The macroeconomic aims of government.

10 questions23 marksFree, no account

Question 1

1 mark

Which of the following is widely recognized as a primary macroeconomic aim of a government?

Question 2

1 mark

A government implements policies to achieve the aim of full employment. Why might this cause a conflict with the macroeconomic aim of price stability?

Question 3

1 mark

A government faces a high rate of demand-pull inflation and a significant deficit on the current account of its balance of payments. Which macroeconomic policy would be most effective in addressing both problems simultaneously?

Question 4

1 mark

Which of the following is a primary macroeconomic aim of a government?

Question 5

1 mark

Which of the following describes a well-known potential conflict between government macroeconomic aims?

Question 6

2 marks

Which of the following is considered a primary macroeconomic aim of a government?

A) Maximizing individual firm profits
B) Maintaining price stability
C) Increasing consumer brand loyalty
D) Reducing household expenditure

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Question 7

4 marks

Explain the nature of the potential conflict between achieving the macroeconomic aim of full employment and maintaining price stability.

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Question 8

5 marks

Analyze the reason why a government's objective of achieving rapid economic growth might conflict with its macroeconomic aim of maintaining balance of payments stability on the current account.

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Question 9

3 marks

(a) State two main macroeconomic aims of a government.

(b) Define the aim of stable prices (low inflation).

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Question 10

4 marks

A government usually aims to achieve several macroeconomic objectives to ensure the stability and growth of the national economy.

(a) Identify two macroeconomic aims of a government, other than economic growth. [2]

(b) Define the term economic growth and state the primary measure used to track it. [2]

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