UK Economy & Government Policy Quiz
Test your knowledge of the UK Economy & Government Policy with these A-Level Economics questions.
This quiz consists of 23 questions (5 multiple-choice and 18 short-answer questions). Scroll down to start the quiz!
Questions
An increase in aggregate demand is most likely to cause inflation when what occurs?
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The underlying long term trend rate of economic growth can be defined as which of the following?
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An outward shift in the long run aggregate supply curve is most likely to have been caused by a fall in what?
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Which of the following best defines Economic growth?
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The UK governments definition of a recession is:
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What impact does economic growth have on the PPF?
It moves it outwards, so more is produced.
Define the term deficit on the balance of payments?
Where the total value of exports is less than the total value of imports.
What is recorded on the balance of payments?
Transactions between the UK and other countries.
If there is a large output gap, what would you expect inflation and unemployment to be like?
Inflation would be low, unemployment would be high.
If aggregate demand increases what happens to unemployment?
It decreases.
Name the three different types of unemployment
Structural, frictional, cyclical.
When does deflation occur?
When there is a fall in the general level of prices.
What are the two main types of inflation?
Demand pull and cost push inflation.
How do the Government measure inflation?
Every month they survey prices and generate the consumer price index (CPI).
How do supply side policies lead to economic growth?
They move the LRAS outwards.
How can the level of economic growth be improved?
Factor productivity of factors of production can be increased.
What is economic growth?
It is where the productive capacity of the economy is increasing.
What does the Phillips Curve Show?
An inverse relationship between unemployment and inflation.
Why might healthy growth and a balance of payments equilibrium be conflicting objectives?
When the economy is growing consumption increases and UK consumers tend to spend more of this money on imports than exports.
How does the UK government keep inflation low?
By using interest rates to control spending.
Which of the following is not a key objective of the UK government - low inflation, low interest rates, balance on the balance of payments, full employment?
Low interest rates
State the four key indicators of national economic performance?
Economic growth, inflation, unemployment, balance of payments.
If the economy experienced a period of low inflation and low unemployment. To What extent would this disprove the inverse relationship suggested by the Phillips curve. (15 marks)
Level 1 – few if any issues recognised, not well applied to economic concepts, some general understanding of low inflation, unemployment and Phillips curve – 0-3 marks
Level 2 – Recognise at least one concept and attempts to apply key terms and knowledge to the answer. Limited analysis. No evaluation. 4-6 marks
Level 3 – Identify at least two relevant issues. Arguments are analysed and come to a conclusion. 7-10 marks
Level 4 – Shows a good understanding of different points of view, prepares a well-structured and supported argument. 11-13 marks
Level 5 – Good evaluation of the different factors supported by evidence presented in an ordered and logical way. 14-15 marks
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