Government Macroeconomic Intervention (Cambridge (CIE) IGCSE Economics): Exam Questions

the provision of immigration officials at an airport

the provision of security cameras in a shopping centre

the provision of security staff at a bank

the provision of ticket inspectors on a train

a museum

a school

a sports field

street lights

Government has complete control over all economic activities

Private ownership and government intervention exist together

All production is carried out by foreign companies

Government sets prices for all goods and services

State

National

Council

Federal

Setting national tax rates

Implementing international trade agreements

Providing incentives for local businesses

Managing the national budget

to encourage an increase in production and to prevent high inflation

to ensure no one is unemployed and to reduce exports

to give everyone equal incomes and to increase government revenue

to protect the environment and to reduce interest rates

an increase in indirect taxation

an increase in inflation

an increase in managers’ salaries

an increase in progressive taxation

It changes the distribution of income.

It ensures the equality of incomes.

It leads to more people paying income taxes.

It reduces the level of unemployment.

Economic growth doesn't impact environmental sustainability

Economic growth can harm the environment but improve social well-being

Economic growth has no impact on social well-being

Economic growth can always coexist with perfect environmental sustainability

A government policy that promotes trade barriers

A decision to adopt a fixed exchange rate system

A deliberate action to influence the value of the national currency

A measure to stop all foreign exchange transactions

To stop private ownership of key industries

To ensure that all goods are provided for free

To solve market failures and provide essential services

To discourage private individuals from participating in the economy

Private investments in all industries

Subsidies provided to domestic businesses

Taxes collected from individuals and businesses

Export earnings from international trade

Removing all trade barriers and tariffs

Encouraging foreign investment without any restrictions

Providing financial assistance to foreign competitors

Imposing tariffs and quotas on imported goods

To eliminate all competition 

To ensure equal distribution of income

To protect consumers, workers, and maintain fair competition

To control all aspects of production and pricing

It could cause uncertainty and lead to lower demand.

It could encourage more savings and lead to higher unemployment.

It could lead to lower prices of consumer goods and result in deflation.

It could stimulate consumer demand and lead to inflation.

 Imports > exports

Imports = Exports

Exports - Imports

Exports > imports

Increase in business taxes

Policies to open a market to more competition

Higher interest rates

Reduction in welfare payments

Unemployment tends to be inversely proportional to real GDP growth

Unemployment tends to have no correlation real GDP growth

Unemployment tends to be directly proportional to real GDP growth

Unemployment tends to be always higher than real GDP growth