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CAIE A-Level Economics A2 10.3.2 Policy Problems Conflicts Questions

Practise tracing crowding out and conflicting policy effects when demand, inflation or external-balance action changes investment, jobs or prices.

Syllabus
2026–2028
Course
Economics 9708
Level
A2

Exam points

  • Explain policy conflicts including crowding out, inflationary pressure, external-balance tensions and trade-offs between macroeconomic objectives.

CAIE A-Level Economics A2 10.3.2 Policy Problems Conflicts Questions question 1

[Maximum number: 1]

Increased borrowing by the government results in higher interest charges and this leads to less private investment expenditure.

Of what is this an example?

A

an automatic stabiliser

B

crowding out

C

the accelerator

D

the substitution effect

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