Government macroeconomic policy objectives — Paper 1 · A Level Economics 9708

20 What is the most likely aim of a government that increases the level of tariffs on imported manufactured goods? A a fall in interest rates B a fall in the exchange rate C a rise in domestic employment D a rise in the general price level

1 marks

Answer: C

This question in 9708/12 May/June 2013

30 A government is faced with rising inflation. It wishes to reduce inflationary pressure while avoiding a rise in unemployment. Which action is most likely to meet its needs? A an increase in employment taxes B an increase in laws to promote competition C an increase in the budget surplus D an increase in the exchange rate

1 marks

Answer: B

This question in 9708/12 Oct/Nov 2016

30 The US Federal Reserve has a stable price (2% inflation) target and a full employment (5 to 5.2% unemployment) target. The diagram shows the inflation rate and unemployment rate that existed between 2007 and 2014. 10 key 8 unemployment rate (%) consumer prices 6 % increase on a year earlier full employment rate 4 2 inflation target 0 2007 2008 2009 2010 2011 2012 2013 2014 What can be concluded about the performance of Federal Reserve economic policy, 2007 to 2014? A The continuing deflation meant failure in the inflation target. B The inflation target was achieved less frequently than the employment target. C The least successful period for economic policy was experienced in 2007. D The nearest to complete policy success was achieved in 2008.

1 marks

Answer: D

This question in 9708/13 May/June 2017

28 What is most likely to be increased by a policy of increased direct taxes and lower government spending? A the balance of payments deficit B the budget deficit C the rate of inflation D the level of unemployment

1 marks

Answer: D

This question in 9708/11 May/June 2019

20 An appreciation of the South African rand in the foreign exchange markets is most likely to assist the South African government achieve which policy objective? A a redistribution of income B a reduction in the rate of inflation C a reduction in the volume of imports D an increase in the level of employment

1 marks

Answer: B

This question in 9708/12 Feb/March 2020

30 Which government action will conflict with the named economic target? target action A lower price inflation lower exchange rate B more consumer spending lower interest rates C more equal incomes lower indirect tax rate D reduced import levels smaller trade quotas

1 marks

Answer: A

This question in 9708/13 Oct/Nov 2022

15 A government is faced with rising inflation. It wishes to reduce inflationary pressure while avoiding a fall in output. Which action is most likely to meet its needs? A an increase in laws to promote competition B an increase in taxation C an increase in the budget surplus D an increase in the exchange rate

1 marks

Answer: A

This question in 9708/12 Feb/March 2023

26 Under which current conditions will supply-side policy measures be most likely to achieve a country’s key macroeconomic goals? unemployment price level level A high stable B high rising C low stable D low rising

1 marks

Answer: B

This question in 9708/12 Feb/March 2023

20 What is true about a government’s macroeconomic objectives? A Economic growth ensures a more even distribution of income. B Increasing output ensures that more workers are employed. C Choosing between macroeconomic objectives requires a normative decision. D A stable rate of inflation means zero inflation is required.

1 marks

Answer: C

This question in 9708/12 May/June 2024

23 Which combination of problems would be most likely to cause a country’s government to reduce taxation and lower interest rates? A demand-pull inflation and a balance of payments current account deficit B demand-pull inflation and a low level of investment C high unemployment and a balance of payments current account deficit D high unemployment and a low level of investment

1 marks

Answer: D

This question in 9708/12 May/June 2024

21 Which macroeconomic objective is most likely to be achieved by increasing income tax? A depreciation of the exchange rate B economic growth C low unemployment D price stability

1 marks

Answer: D

This question in 9708/13 May/June 2024

23 When can a policy be classified as macroeconomic? A when it focuses on the level of individual welfare B when it involves economy-wide institutions and behaviour C when it is based on the control of monopoly markets D when it relies on the use of buffer stock schemes

1 marks

Answer: B

This question in 9708/13 May/June 2024

20 What is an example of a macroeconomic policy? A encourage the consumption of merit goods B reduce pollution in the steel industry C maintain general price stability D reduce unemployment in the service sector

1 marks

Answer: C

This question in 9708/12 Oct/Nov 2024

21 A government wants to operate a tighter monetary policy. What would it increase? A budget surplus B interest rate C money supply D rates of taxation

1 marks

Answer: B

This question in 9708/13 May/June 2025

22 What is not a government macroeconomic policy objective? A economic growth B income equality C low unemployment D price stability

1 marks

Answer: B

This question in 9708/11 Oct/Nov 2025

19 A central bank is asked by the government to help achieve price stability. If inflation rises steeply, which policy will not be directly within the control of the central bank? A increasing the rate of interest to reduce consumer spending B managing a reduction of the money supply C using credit restrictions to regulate lending by commercial banks to households D restricting wage increases in the private and public sectors

1 marks

Answer: D

This question in 9708/12 Oct/Nov 2025

20 What is not a likely reason for a government having the objective of economic growth? A to improve living standards B to improve business confidence C to increase inflationary pressures D to increase consumer choice

1 marks

Answer: C

This question in 9708/12 Oct/Nov 2025