5. What is a motive for a government to aim for low unemployment?

1. What is true about a government’s macroeconomic objectives?

4. Which government macroeconomic policy objectives are most likely to benefit from an increase in aggregate demand?

2. Which row gives a correct assessment of the country’s achievement of these two objectives over the period?

8. Country Y has a lower unemployment rate than Country Z. What must this mean?

7. After a period of high inflation, why might a recession help a country achieve price stability in the future?

10. Which is least likely to be its government’s main macroeconomic policy objective?

6. Why may price stability increase a country’s economic growth rate?

9. When is an increase in productive capacity most likely to be important in promoting the macroeconomic policy objectives of economic growth and price stability?

3. A government decides to remove fees for higher education provided by the public sector and the private sector. What is the consequence of this policy?