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Economics (AS & A Level) · Oct / Nov 2025 · Paper 11 · Question 19

9708Fiscal policy

What is an example of fiscal policy aimed at increasing aggregate demand in an economy?

  1. Aincreasing expenditure by firms on skills training programmes for unskilled workers
  2. Bincreasing the commercial banks’ lending ability
  3. Creducing the rate of income tax for all income earners
  4. Dreducing the rate of interest on loans to manufacturing companies

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Correct answer: C. reducing the rate of income tax for all income earners

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