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

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

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

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

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

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

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?

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

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?

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