What this practice covers
These questions are drawn from past Edexcel A-Level papers and filtered to role of the state in the macroeconomy. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising multiple-choice questions →
What examiners see students get wrong here
These are the errors that cost marks on role of the state in the macroeconomy, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Confusing the deficit (a flow) with the debt (a stock). Reducing the deficit still increases the debt.
- Confusing direct/indirect with progressive/regressive, separate classifications.
- Saying VAT is progressive; indirect taxes are regressive.
- Counting transfer payments as part of G in AD.
- Ignoring automatic stabilisers and treating every change in the deficit as a policy decision.
- Asserting crowding out unconditionally, regardless of the state of the economy.
- Overstating the Laffer curve as established fact.
- Forgetting that fiscal policy affects LRAS as well as AD.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Role of the State in the Macroeconomy revision notes.