2. If an economy is currently at point X on each diagram, what is the most likely conclusion that can be made based on this evidence?

7. Which combination of fiscal policy measures would be most effective in reducing income inequality?

4. Which government policy to counter the effects of income inequality is correctly matched with one of its advantages and one of its disadvantages?

3. Which combination of policies would be most likely to bring a country out of recession?

8. What is likely to happen when the productive capacity of a free enterprise economy increases over a long period of time?

10. Which policy by Middle Eastern countries would be least likely to achieve this economic growth in low-income countries?

1. A government wants to introduce a policy that will reduce the pollution caused by the production of goods. Which policy would not make use of market forces?

9. A government wishes to support growth in the economy’s fishing industry. Which policy is likely to achieve sustainable growth in the fishing industry?

6. What might decrease if a closed economy with a government sector decides to allow international trade?

5. Under which circumstances will a subsidy from the government be most beneficial if there are externalities from producing good X?