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8 marksFiscal Policy

CAPE Economics Unit 2 · 2015 · Paper 2 · Question 3(c)(i)

Table 2 shows government spending and tax revenue for a hypothetical economy over a four-year period (in millions).

Copy Table 2 into your answer booklet and complete it to show the budget balance indicating whether it is a deficit, surplus or neither.

This question uses a figure or table from the paper — you'll see it when you practise.

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Other parts of this question

  1. 3(a)(i)a)Define national budget deficit.[2 marks]
  2. 3(a)(i)b)Define national debt.[2 marks]
  3. 3(a)(ii)State FOUR causes of national debt.[4 marks]
  4. 3(b)(i)Explain why the size of national debt is commonly expressed as a ratio to GDP.[3 marks]
  5. 3(b)(ii)Evaluate the statement "public debt is a burden on future generations".[4 marks]
  6. 3(c)(ii)Calculate the public debt in this economy over the four-year period.[2 marks]

More practice: the rest of this paper · more Fiscal Policy questions · all CAPE Economics Unit 2 past papers