Cambridge International AS Level · Economics (9708)

Government macroeconomic policy objectives: Practice Questions

5 multiple-choice questions marked as you go, and 1 written questions with worked solutions. All on Government macroeconomic policy objectives.

6 questions8 marksFree, no account

Question 1

1 mark

In the context of government macroeconomic objectives, what is the most common definition of economic growth?

Question 2

1 mark

A government implements a policy to reduce the natural rate of unemployment by providing better information about job vacancies.

What is the most likely primary macroeconomic objective of this intervention?

Question 3

1 mark

A government decides to stimulate economic growth through increased investment in infrastructure. What is the most likely long-run impact on the government's macroeconomic objectives?

Question 4

1 mark

A government declares that its primary goal for the next fiscal year is to maintain price stability. Which of the following data trends would most clearly suggest that this objective is not being met?

Question 5

1 mark

The following data represents the economic performance of a country over two years:

Year 1: Real GDP Growth = 3.5%, Inflation = 2.1%, Unemployment = 4.5%
Year 2: Real GDP Growth = 1.2%, Inflation = 1.8%, Unemployment = 6.2%

Which macroeconomic objective has seen the most significant deterioration between Year 1 and Year 2?

Question 6

3 marks

Why might a government's macroeconomic policy objective of economic growth be considered sustainable only if it is accompanied by the objective of price stability?

Write your answer out first, then check it against the worked solution.

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