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Fiscal Policy · CAPE Economics Unit 2

51 past-paper questions on Fiscal Policy, part of Macroeconomic Problems and Policies, from every CAPE Economics Unit 2 paper on Quelpr.

Practise Fiscal Policy
  1. 9(b)3 marks· CAPE Economics Unit 2 · 2006 · Paper 1Outline THREE lags that are associated with fiscal policy.
  2. 10(a)(i)2 marks· CAPE Economics Unit 2 · 2006 · Paper 1Distinguish between a budget surplus and a budget deficit.
  3. 2(b)(i)9 marks· CAPE Economics Unit 2 · 2006 · Paper 2Using aggregate demand and aggregate supply curves to illustrate your points, discuss the impacts on price level (P) and equilibrium GDP (Y) in the short run of a tax cut holding government purchases constant, with the…
  4. 3(a)(i)6 marks· CAPE Economics Unit 2 · 2006 · Paper 2Differentiate between 'discretionary fiscal policy' and 'automatic stabilizers'.
  5. 3(a)(ii)6 marks· CAPE Economics Unit 2 · 2006 · Paper 2Using examples, explain how discretionary fiscal policy and automatic stabilizers work during periods of recession or inflation in an economy.
  6. 3(c)10 marks· CAPE Economics Unit 2 · 2006 · Paper 2Suppose the government finances the increase in government spending with an equal increase in taxes to maintain a balanced budget. Explain what happens to aggregate spending as a result of a rise in both taxes and…
  7. 3(d)(i)4 marks· CAPE Economics Unit 2 · 2006 · Paper 2What is the balanced budget multiplier?
  8. 3(d)(ii)6 marks· CAPE Economics Unit 2 · 2006 · Paper 2Referring to the solution in (c), how large is the balanced budget multiplier? Explain your answer.
  9. 4(b)25 marks· CAPE Economics Unit 2 · 2007 · Paper 2Discuss the fiscal policy tools available to Caribbean countries that can be used to increase and decrease output and employment.
  10. 4(b)(i)5 marks· CAPE Economics Unit 2 · 2008 · Paper 2Explain how fiscal policy can have a negative impact on budget deficit.
  11. 4(b)(ii)5 marks· CAPE Economics Unit 2 · 2008 · Paper 2Explain how fiscal policy can have a negative impact on aggregate demand.
  12. 4(b)(iii)5 marks· CAPE Economics Unit 2 · 2008 · Paper 2Explain how fiscal policy can have a negative impact on employment.
  13. 4(b)(iv)5 marks· CAPE Economics Unit 2 · 2008 · Paper 2Explain how fiscal policy can have a negative impact on inflation.
  14. 4(c)(i)5 marks· CAPE Economics Unit 2 · 2008 · Paper 2Explain what is meant by 'automatic stabilizers'.
  15. 4(c)(ii)4 marks· CAPE Economics Unit 2 · 2008 · Paper 2Identify TWO examples of automatic stabilizers.
  16. 4(a)(i)3 marks· CAPE Economics Unit 2 · 2009 · Paper 2Define balanced budget multiplier.
  17. 4(a)(ii)2 marks· CAPE Economics Unit 2 · 2009 · Paper 2Define fiscal policy.
  18. 4(a)(iii)2 marks· CAPE Economics Unit 2 · 2009 · Paper 2Define balanced budget.
  19. 4(a)(iv)2 marks· CAPE Economics Unit 2 · 2009 · Paper 2Define unbalanced budget.
  20. 4(b)5 marks· CAPE Economics Unit 2 · 2009 · Paper 2Explain how an 'equal' or 'balanced' change in government spending and tax revenues may cause income to rise.
  21. 4(c)(i)5 marks· CAPE Economics Unit 2 · 2009 · Paper 2Discuss how government's borrowing to finance fiscal deficits can have a negative impact on domestic interest rates.
  22. 4(c)(ii)5 marks· CAPE Economics Unit 2 · 2009 · Paper 2Discuss how government's borrowing to finance fiscal deficits can have a negative impact on domestic investment.
  23. 4(c)(iii)5 marks· CAPE Economics Unit 2 · 2009 · Paper 2Discuss how government's borrowing to finance fiscal deficits can have a negative impact on inflation.
  24. 4(c)(iv)5 marks· CAPE Economics Unit 2 · 2009 · Paper 2Discuss how government's borrowing to finance fiscal deficits can have a negative impact on the value of the country's currency in relation to the United States dollar.
  25. 4(d)10 marks· CAPE Economics Unit 2 · 2009 · Paper 2Explain, using a graph, the relationship between investment and the rate of interest. Show on the graph how expansionary fiscal policy can have a negative impact on the level of investment.
  26. 4(a)5 marks· CAPE Economics Unit 2 · 2010 · Paper 2Explain what is meant by 'automatic stabilizers', giving TWO examples of automatic stabilizers.
  27. 4(b)(i)3 marks· CAPE Economics Unit 2 · 2010 · Paper 2Explain what is meant by the term 'fiscal policy'.
  28. 4(b)(ii)9 marks· CAPE Economics Unit 2 · 2010 · Paper 2Outline THREE ways by which fiscal policy can be used by Caribbean governments to increase the level of employment and output in their economies.
  29. 4(c)8 marks· CAPE Economics Unit 2 · 2010 · Paper 2Discuss TWO reasons why fiscal policy may not work in practice in the small open economies of the Caribbean.
  30. 4(a)6 marks· CAPE Economics Unit 2 · 2011 · Paper 2Outline three methods that a government can use to finance its fiscal deficit.
  31. 4(b)(i)2 marks· CAPE Economics Unit 2 · 2011 · Paper 2Explain how government borrowing on the domestic market to finance large fiscal deficits can affect domestic interest rates.
  32. 4(b)(ii)2 marks· CAPE Economics Unit 2 · 2011 · Paper 2Explain how government borrowing on the domestic market to finance large fiscal deficits can affect domestic investment.
  33. 4(d)9 marks· CAPE Economics Unit 2 · 2011 · Paper 2Identify three fiscal measures available to Caribbean countries to boost output in times of recession and evaluate the effectiveness of each fiscal measure.
  34. 4(a)(i)2 marks· CAPE Economics Unit 2 · 2012 · Paper 2Define 'Fiscal policy'.
  35. 4(a)(ii)2 marks· CAPE Economics Unit 2 · 2012 · Paper 2Define 'Budget surplus'.
  36. 4(a)(iii)2 marks· CAPE Economics Unit 2 · 2012 · Paper 2Define 'Transfer payments'.
  37. 4(b)(ii)3 marks· CAPE Economics Unit 2 · 2012 · Paper 2Outline THREE limitations of Fiscal policy.
  38. 4(a)(i)1 mark· CAPE Economics Unit 2 · 2013 · Paper 2Define the term 'fiscal policy'.
  39. 4(a)(ii)12 marks· CAPE Economics Unit 2 · 2013 · Paper 2Discuss THREE ways in which fiscal policy can be used by Caribbean governments to increase the level of employment and output in their economies.
  40. 4(b)6 marks· CAPE Economics Unit 2 · 2013 · Paper 2Outline THREE reasons why some fiscal measures may NOT work in the small open economies of the Caribbean.
  41. 4(c)6 marks· CAPE Economics Unit 2 · 2013 · Paper 2Explain the 'crowding out effect' and state how this effect can be avoided.
  42. 4(a)(i)2 marks· CAPE Economics Unit 2 · 2014 · Paper 2Define the term 'balanced budget multiplier'.
  43. 4(a)(ii)3 marks· CAPE Economics Unit 2 · 2014 · Paper 2Explain the term 'automatic stabilizer'.
  44. 4(a)(iii)2 marks· CAPE Economics Unit 2 · 2014 · Paper 2Identify TWO examples of automatic stabilizers.
  45. 3(a)(i)a)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2Define national budget deficit.
  46. 3(c)(i)8 marks· CAPE Economics Unit 2 · 2015 · Paper 2Copy Table 2 into your answer booklet and complete it to show the budget balance indicating whether it is a deficit, surplus or neither.
  47. 4(a)(i)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2Define the term 'fiscal policy'.
  48. 4(a)(ii)5 marks· CAPE Economics Unit 2 · 2015 · Paper 2Explain, using TWO examples, the term 'automatic stabilizers'.
  49. 4(a)(iii)4 marks· CAPE Economics Unit 2 · 2015 · Paper 2Distinguish between 'discretionary fiscal policy' and 'non-discretionary fiscal policy'.
  50. 2(a)(i)4 marks· CAPE Economics Unit 2 · 2017 · Paper 2Distinguish between 'monetary policy' and 'fiscal policy'.
  51. 2(c)12 marks· CAPE Economics Unit 2 · 2021 · Paper 2With the aid of a diagram representing the market for loanable funds, discuss 'crowding out'.

Related topics in Macroeconomic Problems and Policies