Pearson Edexcel A Level · Economics A (9EC0)

4.5.3-4.5.4 Public sector finances and macroeconomic policies in a global context: Practice Questions

5 multiple-choice questions marked as you go, and 3 written questions with worked solutions. All on 4.5.3-4.5.4 Public sector finances and macroeconomic policies in a global context.

8 questions19 marksFree, no account

Question 1

1 mark

In the context of public sector finances, a structural deficit is defined as the part of the fiscal deficit that:

Question 2

1 mark

Which of the following factors is most likely to lead to an increase in the size of a country's cyclical deficit?

Question 3

1 mark

A government observes that its fiscal deficit increases during an economic recession without any change in tax rates or discretionary spending programs. This is most likely due to the operation of:

Question 4

1 mark

If a government aims to reduce its national debt as a percentage of GDP, which combination of factors would be most effective?

Question 5

1 mark

Which of the following best describes the distinction between the fiscal deficit and the national debt?

Question 6

4 marks

Distinguish between a structural deficit and a cyclical deficit, and identify which one is more likely to be eliminated without direct government intervention as the output gap closes.

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

Question 7

6 marks

Evaluate why a country experiencing a high structural deficit despite a narrowing cyclical deficit might find it increasingly difficult to attract Foreign Direct Investment (FDI) if it relies solely on discretionary fiscal policy to manage its public sector finances.

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

Question 8

4 marks

Using the concept of automatic stabilisers, explain how a government's fiscal deficit is likely to change during a period of significant negative economic growth.

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

* The content provided by thinka is generated by AI and may not always be accurate or up-to-date. Please use it as a supplementary resource and verify with official materials.

You've seen the model answer. Now get yours marked.

This page can show you how a good answer looks. It cannot tell you what your answer was missing. thinka marks your written work against the real mark scheme in about 15 seconds.

Get My Answers Marked Back to the notes

Want more questions like these? Get a fresh set on this topic, graded as you go.

Practice More