Edexcel A Level Economics B
Edexcel A Level Economics B 2.6 Introduction to Macroeconomic Policy Exam Questions
Free Edexcel A Level Economics B exam questions on 2.6 Introduction to Macroeconomic Policy, with mark schemes. Covers objectives, fiscal, monetary and supply-side policy.
2.6 Introduction to Macroeconomic Policy exam questions
1 question pack of real past exam questions with its mark scheme. Answer every question without notes, then mark your answers line by line against the mark scheme.
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A Level Economics Flashcards
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About Edexcel A Level Economics B 2.6 Introduction to Macroeconomic Policy
2.6 introduces the tools governments and central banks use to manage the economy. Questions ask you to explain how a policy works and evaluate its effect.
What you need to know
- Objectives Growth, low unemployment, low and stable inflation, balance of payments stability, and others such as reducing inequality.
- Fiscal policy Government spending and taxation to influence AD.
- Monetary policy Bank Rate and quantitative easing set by the Bank of England to hit the 2 percent inflation target.
- Supply-side policy Policies to raise productive capacity, such as education, infrastructure and tax incentives.
Common mistakes in 2.6 Introduction to Macroeconomic Policy
- Saying the government sets interest rates.
- Not mentioning time lags when evaluating policies.
- Confusing fiscal and monetary policy.
Try three 2.6 Introduction to Macroeconomic Policy exam-style questions
1. Explain how a cut in income tax could increase AD. (2 marks)
Show the mark scheme answer
Disposable income rises (1), so consumers spend more and consumption increases AD (1).
2. State the UK inflation target. (1 mark)
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2 percent CPI inflation.
3. Explain one weakness of monetary policy. (2 marks)
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There are time lags of up to two years (1), so the economy may have changed by the time the policy takes effect (1).
2.6 Introduction to Macroeconomic Policy FAQs
What does Edexcel A Level Economics B 2.6 cover?
Macroeconomic objectives and the use of fiscal, monetary and supply-side policies.
Who sets monetary policy in the UK?
The Monetary Policy Committee of the Bank of England.
How is this extended later?
Theme 4 looks at macroeconomic policies and their impact on firms and individuals in more depth.
Revise this topic with flashcards: A Level Economics Flashcards, with mark scheme answers for Anki and Quizlet.
