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6 marksFiscal Policy

CAPE Economics Unit 2 · 2013 · Paper 2 · Question 4(b)

Outline THREE reasons why some fiscal measures may NOT work in the small open economies of the Caribbean.

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Other parts of this question

  1. 4(a)(i)Define the term 'fiscal policy'.[1 mark]
  2. 4(a)(ii)Discuss THREE ways in which fiscal policy can be used by Caribbean governments to increase the level of employment and output in their economies.[12 marks]
  3. 4(c)Explain the 'crowding out effect' and state how this effect can be avoided.[6 marks]

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