CAIE A-Level Economics A2 10.3.3 Macroeconomic Government Failure Questions

Practise assessing government failure by comparing intended macroeconomic objectives with unintended output, efficiency and migration effects.

Exam points

Assess macroeconomic government failure by comparing intended objectives with unintended output, efficiency or migration effects.

[Maximum number: 1]

A government wishes to increase economic efficiency in the country. It raises the rate of income tax which leads to the emigration of high-earning skilled workers that the country needs.

How would this outcome be described?

government
failure

market failure

negative
externality

yes

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CAIE A-Level Economics A2 10.3.3 Macroeconomic Government Failure Questions question 1