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AS Econ - Macro - Monetary and fiscal policies

Quiz by Mark Seccombe

EdExcel (A-Level)
Economics A
English National Curriculum

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9 questions
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  • Q1
    When investment increases as a result of an increase in GDP, this is an example of:
    Government failure
    The accelerator
    The multiplier
    Monetary policy
    45s
    2.4.4
  • Q2
    Which one of the following is not a macro-economic objective?
    To maintain full employment
    To ensure price stability
    To ensure high levels of growth
    To reduce the tax burden
    45s
    2.6.1
  • Q3
    Which one of the following headlines indicates the use of monetary policy?
    "Big reduction in government borrowing announced in the budget."
    "Government declares its determination to halt the fall in the value of money."
    "Misery for homeowners as interest rates are raised."
    "More money in everyone's pockets as taxes are lowered."
    45s
    2.6.2a
  • Q4
    In the short run, a fall in the budget deficit is most likely to increase
    Unemployment
    The quantity of imports
    Interest rates
    The rate of inflation
    45s
    2.2.4
  • Q5
    Which one of the following is a correct statement?
    The Bank of England uses fiscal policy to control the exchange rate
    Fiscal policy is used only to affect the demand of the economy
    The Bank of England is responsible for monetary and fiscal policy
    Fiscal policy can be used to affect the trade balance and the rate of inflation
    45s
    2.6.2b
  • Q6
    One of the main functions of supply-side policies in the UK economy is to
    Reduce the size of the government's national debt
    Cause the rate of growth of aggregate supply to exceed the rate of growth of AD
    Lower the long-run trend rate of growth of the economy
    Creates incentives designed to improve economic performance
    45s
    2.6.3
  • Q7
    All other things being equal, a fall in the value of the pound against the euro would be likely to lead to
    A fall in raw material prices of EU imports coming into the UK
    A worsening of the UK's trade deficit with the EU
    A rise in the euro price of UK exports
    An increase in aggregate demand
    45s
    2.2.5
  • Q8
    Which one of the following statements relating to monetary policy is correct?
    A cut in interest rates always increases inflation
    Interest rate changes have no effect on aggregate supply
    An increase in interest rates will raise the level of business investment
    A rise in interest rates may cause an appreciation of the exchange rate
    45s
    4.1.8b
  • Q9
    Which tax is most likely to be regressive?
    Sales tax
    An inheritance tax
    A property tax
    Income tax
    45s
    2.6.2b

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