Pearson Edexcel IGCSE · Economics

Government policies: Practice Questions

2 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Government policies.

7 questions21 marksFree, no account

Question 1

1 mark

Which of the following is a primary tool used by a government when implementing fiscal policy?

Question 2

1 mark

If a government wishes to reduce income inequality, which fiscal policy measure would be the most effective?

Question 3

2 marks

Identify two main areas of government expenditure that a government might focus on when implementing its fiscal policy.

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

Question 4

3 marks

Explain the mechanism by which an increase in interest rates is likely to reduce the level of investment by businesses in an economy.

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

Question 5

2 marks

Identify one example of an indirect tax that a government might use as part of its fiscal policy to raise revenue.

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

Question 6

4 marks

Fiscal policy involves the management of government revenue and expenditure to achieve macroeconomic objectives.

(a) Define the term fiscal policy.
(b) Identify two examples of direct taxes used by a government to collect revenue.
(c) Explain what is meant by a fiscal surplus.
(d) Identify one main area of focus for government expenditure.

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

Question 7

8 marks

A government is seeking to manage its economy to achieve multiple macroeconomic objectives simultaneously. It is currently reviewing its toolkit of policy measures.

(a) Explain how the central bank uses monetary policy to reduce demand-pull inflation. (2 points)
(b) Analyze the likely impact of privatisation on an economy’s productive potential. (2 points)
(c) Evaluate whether pollution permits are a more effective government control than legislation for a government aiming to balance economic growth with environmental protection. (4 points)

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.