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CAIE A-Level Economics 5.1 Government macroeconomic policy objectives Question Bank

Practise recognising macroeconomic objectives and matching policy choices to price stability, low unemployment and economic growth.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • interpret CPI, unemployment or growth conditions to choose a suitable policy response

Covered syllabus points

5.1.1—Macroeconomic policy objectives

5.1 Government macroeconomic policy objectives question 1

[Maximum number: 1]

Sweden had a change in its Consumer Prices Index (CPI) of -0.6 %.
Which combination of policies might its government use to restore price stability?

A

increase interest rates and increase indirect taxes

B

increase interest rates and reduce government spending

C

reduce government spending and increase income tax

D

reduce interest rates and increase government spending

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