Government objectives and policies

From Paper 2: How the economy works

31 mark

Inflation is:

From Paper 2: How the economy works

41 mark

The Bank of England's inflation target is:

From Paper 2: How the economy works

51 mark

Which type of unemployment is caused by a fall in demand during a recession?

From Paper 2: How the economy works

61 mark

A progressive tax is one where:

From Paper 2: How the economy works

71 mark

Which one of the following is a supply-side policy?

From Paper 2: How the economy works

122 marks

A basket of goods cost £250 last year and £265 this year. Calculate the rate of inflation.

From Paper 2: How the economy works

133 marks

Explain one cost of unemployment to the government.

From Paper 2: How the economy works

15.12 marks

Extract C (data are illustrative, written for this paper):

	Year 1	Year 2	Year 3
Inflation (CPI, %)	2.5	9.1	4.0
Unemployment (%)	3.9	3.7	4.4
Bank Rate (%)	0.25	3.5	5.25
Real GDP growth (%)	4.3	0.1	0.5

Higher energy and food prices pushed inflation up in Year 2. The Bank of England raised Bank Rate sharply. Mortgage payments rose for many households, while savers earned more interest. Identify the two years with the largest change in the rate of inflation, and state the change.

From Paper 2: How the economy works

15.33 marks

Explain why higher energy prices caused inflation.

From Paper 2: How the economy works

15.44 marks

Explain how raising Bank Rate is intended to reduce inflation.

From Paper 2: How the economy works

15.54 marks

Using Extract C, explain one possible conflict between government objectives.

From Paper 2: How the economy works

15.66 marks

Analyse the effects of high inflation on different groups in the economy.

From Paper 2: How the economy works

15.79 marks

Evaluate whether monetary policy is the best way to control inflation.

Score 0 / 38 · 0 of 13 marked

This paper is written by Plasmo in the style of the AQA GCSE Economics exam. It is not a past paper and is not produced or endorsed by the exam board.