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Practice Questions

Unit 4
Explain how fiscal policy can be used to reduce cyclical unemployment during an economic downturn.

Unit 2
Explain how a subsidy on electric vehicles may improve market efficiency. In your response, refer to market failure, externalities, and the role of government intervention.


Practice Questions

Unit 4
Draw two models to show how an economy may move from optimal level of economic growth to "stagflation conditions". Explain a hypothetical event which may cause this to happen and one economic policy which could be implemented to address it. 

Unit 2
Explain the concept of the "tragedy of the commons," using a real or hypothetical example, and propose a potential government policy which can be used to reduce its impacts. 


Practice Questions

Unit 4
1. Explain the concept of leading, lagging and coincident indicators providing two examples of each. 

Unit 2
1. Explain the concepts of negative and positive externalities using casino games (negative) and youth sports (positive) as examples. Draw a price mechanism model for each showing these externalities. 

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