Explain the difference between a budget surplus and a budget deficit and consider the extent to which a budget surplus is better than a budget deficit.
With the help of examples, explain the difference between the marginal rate of taxation and the average rate of taxation and consider whether a government should decide to increase the rate of indirect tax to raise additional revenue.
Assess whether the achievement of a balanced budget should always be a main government macroeconomic objective.
Assess the extent to which using fiscal policy would be the best way to reduce a high rate of inflation.
Assess whether supply-side policy or demand-side policy is the better way of reducing this inflation.
Low unemployment is a macroeconomic policy objective for a government.
Assess the extent to which this is most likely to be achieved by supply-side policy.
Assess whether contractionary fiscal policy is likely to be the best way to reduce a current account deficit on the balance of payments.
The Chinese government has re-emphasised its commitment to rebalancing the economy from one focused mainly on investment and exports to one aiming to increase the proportion spent on domestic consumption.
Assess the extent to which it would be possible to achieve this by fiscal policy alone.