plumiFiscal policy: AQA A‑Level Economics questions
Every AQA A-Level Economics exam question on 4.2.5.1 Fiscal policy, 2020–2025, with its mark scheme and examiner’s report.
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![June 2025 Paper 2, question 09: Explain factors that may lead to an increase in a country’s national debt as a percentage of GDP. [15 marks] Essay 1 By September 2024, the UK’s national debt h](https://pub-e8a9dbab8e2a4d089f52b2a45e0d0b50.r2.dev/bank/71362-jun25-e1-09-qp.webp)
![June 2025 Paper 2, question 10: Assess the view that raising direct taxes to finance an increase in government spending is better than raising indirect taxes. [25 marks] Essay 1 By September 2](https://pub-e8a9dbab8e2a4d089f52b2a45e0d0b50.r2.dev/bank/71362-jun25-e1-10-qp.webp)
![June 2025 Paper 3, question 06: Which one of the following is most likely to indicate that a government is trying to cause a significant change in the pattern of economic activity? [1 mark] A](https://pub-e8a9dbab8e2a4d089f52b2a45e0d0b50.r2.dev/bank/71363-jun25-a-06-qp.webp)
![June 2025 AS Paper 2, question 21: Define ‘national debt’ Extract B (line 16). [3 marks] Context 1 Total for this context: 50 marks POPULATION CHANGES AND THE UK ECONOMY Extract A: UK population](https://pub-e8a9dbab8e2a4d089f52b2a45e0d0b50.r2.dev/bank/71352-jun25-c1-21-qp.webp)
![June 2024 Paper 2, question 14: Evaluate the view that increasing taxation is the best way to reduce a budget deficit. [25 marks] Essay 3 In November 2022, the UK government announced large pu](https://pub-e8a9dbab8e2a4d089f52b2a45e0d0b50.r2.dev/bank/71362-jun24-e3-14-qp.webp)
![June 2024 AS Paper 2, question 21: Define ‘Regressive taxes’ Extract C (line 12). [3 marks] Context 1 Total for this context: 50 marks TROUBLING TIMES FOR THE UK ECONOMY Extract A: Inflation and](https://pub-e8a9dbab8e2a4d089f52b2a45e0d0b50.r2.dev/bank/71352-jun24-c1-21-qp.webp)
All 55 questions on Fiscal policy, as a list
- June 2025, Paper 2, Q09 (15 marks): Explain factors that may lead to an increase in a country’s national debt as a percentage of GDP. [15 marks] Essay 1 By September 2024, the UK’s national debt h
- June 2025, Paper 2, Q10 (25 marks): Assess the view that raising direct taxes to finance an increase in government spending is better than raising indirect taxes. [25 marks] Essay 1 By September 2
- June 2025, Paper 3, Q06 (1 mark): Which one of the following is most likely to indicate that a government is trying to cause a significant change in the pattern of economic activity? [1 mark] A
- June 2025, AS Paper 2, Q15 (1 mark): To reduce the impact of rising inflation, the government cut indirect taxes on several key goods and services and made a one-off payment to all low-income house
- June 2025, AS Paper 2, Q18 (1 mark): Table 3 shows the tax-free allowance and income tax rates in four countries, A, B, C and D. The tax-free allowance is the amount of income on which a person doe
- June 2025, AS Paper 2, Q21 (3 marks): Define ‘national debt’ Extract B (line 16). [3 marks] Context 1 Total for this context: 50 marks POPULATION CHANGES AND THE UK ECONOMY Extract A: UK population
- June 2025, AS Paper 2, Q22 (4 marks): Assume that the UK population was 1.5% higher in September 2023 than in 2020. Use Extract A and the information in Extract B (line 17) to calculate UK national
- June 2025, AS Paper 2, Q31 (10 marks): Extract E (lines 12–13) states: ‘To increase revenue, the main rate of corporation tax, the tax payable on firms’ profits, was increased to 25%.’ Explain why an
- June 2025, AS Paper 2, Q32 (25 marks): Extract F (lines 11–13) states: ‘There are signs that business investment is starting to increase again, but government intervention may be needed to encourage
- June 2024, Paper 2, Q07 (9 marks): Extract E (lines 17–18) states: ‘A low rate of corporation tax has also contributed to both short-run and long-run economic growth.’ With the help of a diagram,
- June 2024, Paper 2, Q14 (25 marks): Evaluate the view that increasing taxation is the best way to reduce a budget deficit. [25 marks] Essay 3 In November 2022, the UK government announced large pu
- June 2024, Paper 3, Q17 (1 mark): Table 5 shows a household's income and the amount the household has to pay in tax for three taxes. Table 5 Income (£) Tax F (£) Tax G (£) Tax H (£) 10 000 1 000
- June 2024, Paper 3, Q19 (1 mark): Table 6 shows the national debt and gross domestic product (GDP) for the UK in the second quarters of 2020 and 2022. Table 6 Year National debt (£bn) GDP (£bn)
- June 2024, AS Paper 2, Q12 (1 mark): A government is considering how to fund additional spending on healthcare. One option is to raise the rate of tax charged on the whole of firms’ profits from 19
- June 2024, AS Paper 2, Q16 (1 mark): A government is concerned that aggregate demand is growing faster than the productive capacity of the economy. In addition, the deficit on its balance of paymen
- June 2024, AS Paper 2, Q17 (1 mark): Figure 3 shows the demand (D) and supply (S) curves for a good in a market. Figure 3 The diagram shows a shift of the supply curve for the good from S1 to S2 ca
- June 2024, AS Paper 2, Q21 (3 marks): Define ‘Regressive taxes’ Extract C (line 12). [3 marks] Context 1 Total for this context: 50 marks TROUBLING TIMES FOR THE UK ECONOMY Extract A: Inflation and
- June 2024, AS Paper 2, Q26 (25 marks): Extract C (lines 17–18) states: ‘These policies could restrict economic growth in the short term and increase the likelihood of the economy going into recession
- June 2024, AS Paper 2, Q30 (4 marks): Extract E (lines 20–21) states: ‘…the government intends to cut the budget deficit to reduce borrowing’. Draw an AD/AS diagram to show the most likely short-run
- June 2024, AS Paper 2, Q32 (25 marks): Extract F (lines 5–6) states: ‘As part of its long-term plan, the government has 12 levelling-up ‘missions’ or objectives. These include raising pay, employment
- June 2023, Paper 2, Q01 (2 marks): Using the data in Extract A (Figure 1), calculate the difference between Ireland’s corporation tax rate and the mean corporation tax rate of the other five Euro
- June 2023, Paper 2, Q03 (9 marks): Extract C (line 13) states: ‘High economic growth rates allowed Ireland to run a budget surplus in 2018 and 2019.’ With the help of a diagram, explain how high
- June 2023, Paper 2, Q04 (25 marks): Extract B (lines 1–3) states: ‘Ireland has dropped its low-tax policy of the past 18 years, which had helped to persuade some of the world’s biggest companies,
- June 2023, Paper 3, Q17 (1 mark): Which one of the following is a role of the UK’s Office for Budget Responsibility? [1 mark] A Deciding how much public funding is given to each government depar
- June 2023, Paper 3, Q30 (1 mark): Figure 9 shows the government budget balance for an economy from 2019 to 2023. Figure 9 All other things being equal, between 2019 and 2023, the national debt o
- June 2023, Paper 3, Q33 (25 marks): After considering Extract D, and the original evidence in Extracts A, B and C, would you recommend that the government of Sri Lanka cut its spending to reduce i
- June 2023, AS Paper 2, Q05 (1 mark): Which one of the following is a direct tax? [1 mark] A Corporation tax B Fuel tax C Import tax D Vehicle tax
- June 2023, AS Paper 2, Q11 (1 mark): A government wishing to reduce inflation through the use of fiscal policy could [1 mark] A cut government borrowing. B decrease income tax. C raise interest rat
- June 2023, AS Paper 2, Q13 (1 mark): The national debt is the sum of all past and current borrowing, less repayments, undertaken by [1 mark] A firms and government. B firms, government and househol
- June 2023, AS Paper 2, Q18 (1 mark): Which one of the following is an example of a contractionary fiscal policy designed to reduce inflation while, at the same time, minimising the negative impact
- June 2023, AS Paper 2, Q22 (4 marks): The original price of an overnight stay in a hotel room is £180 including VAT. Calculate the new price of an overnight stay, following the reduction in VAT refe
- June 2022, Paper 3, Q06 (1 mark): Figure 2 shows two aggregate demand (AD1 and AD2) curves and the short-run aggregate supply (SRAS) curve for an economy. Figure 2 Which one of the following is
- June 2022, Paper 3, Q17 (1 mark): Table 2 shows the amount paid in tax by individuals at different levels of income. Table 2 Income (£) Tax paid (£) 20 000 4 000 30 000 5 400 40 000 6 400 50 000
- June 2022, AS Paper 2, Q06 (1 mark): A deflationary policy is designed to A avoid deflation. B increase aggregate demand. C lead to deflation. D reduce aggregate demand. [1 mark]
- June 2022, AS Paper 2, Q11 (1 mark): An indirect tax is a tax levied on A firms’ profits. B income. C savings. D spending. [1 mark]
- June 2022, AS Paper 2, Q14 (1 mark): Which one of the following is an example of expansionary fiscal policy? A reduction in the A budget deficit. B budget surplus. C trade deficit. D trade surplus.
- June 2022, AS Paper 2, Q19 (1 mark): In the short run, an increase in government borrowing is most likely to result in lower A consumer expenditure. B government expenditure. C national debt. D une
- June 2022, AS Paper 2, Q28 (4 marks): If the government allocated £275 billion to social security spending in 2018–19, use Extract D to calculate, to the nearest billion, the total amount of governm
- June 2022, AS Paper 2, Q29 (4 marks): Use Extract D to identify two significant points of comparison regarding the composition of government spending between 1997–98 and 2018–19. [4 marks] Context 2
- June 2022, AS Paper 2, Q31 (10 marks): Extract F (lines 1–2 and 8) states: ‘As part of fiscal policy, government spending can be used to allocate resources to different regions and sectors of the eco
- June 2022, AS Paper 2, Q32 (25 marks): Extract E (lines 4–6) states: ‘…the report suggested that significant increases in spending would be required to help improve the wellbeing of the UK population
- November 2021, Paper 2, Q02 (4 marks): Explain how the data in Extract A (Figures 1 and 2) show that in 2012 Greece was more likely to have a problem with its national debt than the UK. [4 marks] Con
- November 2021, Paper 2, Q03 (9 marks): Extract B (line 9) states: ‘The government spending cuts also severely damaged private-sector jobs.’ With the help of a diagram, explain how a reduction in gove
- November 2021, Paper 2, Q04 (25 marks): Extract C (lines 17–18) states: ‘Some argue that the UK should increase taxes rather than add to the national debt.’ Using the data in the extracts and your kno
- November 2021, Paper 2, Q14 (25 marks): Assess policies which can be used to reduce cyclical instability in the UK. [25 marks] Essay 3 Commercial banks provide financial services for both individuals
- November 2021, Paper 3, Q10 (1 mark): At the end of the previous financial year, a country had a national debt of £20 000 billion. The government’s planned expenditure for the current year exceeds i
- November 2020, Paper 2, Q09 (15 marks): Explain the possible causes of a falling budget deficit. [15 marks] Essay 1 In 2017, the UK’s annual budget deficit was 2.3% of GDP, the lowest level since 2001
- November 2020, Paper 2, Q10 (25 marks): To what extent do you agree that reducing the budget deficit is more important to the UK’s macroeconomic performance than reducing the current account deficit o
- November 2020, Paper 3, Q21 (1 mark): All other things being equal, which one of the following is most likely to increase the national debt? A Foreign companies increasing their direct investment in
- November 2020, Paper 3, Q27 (1 mark): Which one of the following is correct for a proportional tax on income? A The amount of tax paid increases as income increases B The marginal rate of tax is low
- November 2020, AS Paper 2, Q09 (1 mark): A government wishes to reduce the surplus on the current account of the balance of payments. Which one of the following sets of policies is likely to be the mos
- November 2020, AS Paper 2, Q11 (1 mark): At the start of the year, the national debt for an economy was £920 billion. In the previous year, the budget deficit was £60 billion. In the current year, gove
- November 2020, AS Paper 2, Q14 (1 mark): Which statement applies to progressive taxes, but does not apply to proportional or regressive taxes? As income falls A a larger percentage of income is taken i
- November 2020, AS Paper 2, Q18 (1 mark): Figure 5 shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves for an economy. Figure 5 Which one of the following policies is most likely
- November 2020, AS Paper 2, Q27 (3 marks): Define ‘growing budget deficit’ in Extract F (lines 15–16). [3 marks] Context 2 Total for this context: 50 marks CONFLICTING ECONOMIC OBJECTIVES Extract D: UK c
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