5 past-paper questions on this unit. Three of them are below. Answer on the page: each one is marked the moment you pick, the correct option is shown whether or not you found it, and the full explanation opens either way.
Cambridge IGCSEPaper 1 MCQsFree account
Supply-Side Policy: three questions to try now
Real past-paper questions, the answer key from the mark scheme, and the explanation that goes with it. No account needed to answer them.
Question 1
A government uses different supply-side policy measures to improve economic performance. Which policy measure would not satisfy one of the government’s macroeconomic aims?
Answer: A.
Read the command term carefully: this asks which measure would NOT satisfy a government aim. Supply-side policy aims to raise the productive capacity of the economy, and a tax change that increases evasion does the opposite, it reduces the revenue available to fund public investment without improving output or skills. The other three each deliver a recognised macroeconomic aim: foreign investment supports the balance of payments, privatisation is intended to raise efficiency and growth, and retraining reduces structural unemployment.
Question 2
Which pair of government actions combines a fiscal policy with a supply-side policy?
Answer: B.
Sort each action into its policy family. Cutting tax rates is fiscal, since it concerns taxation, and providing information on job vacancies is supply-side, since it helps workers match to jobs and improves how the labour market functions. The other pairs go wrong on one side or both: interest rates and bank lending controls are monetary, and while privatisation and labour market deregulation are genuinely supply-side, they are paired there with monetary measures rather than fiscal ones.
Question 3
Which policy would be most likely to reduce unemployment in the short run?
Answer: B.
The question says SHORT RUN, which decides it. Cutting income tax raises disposable income immediately, spending follows, and firms hire to meet the extra demand within months. The other three are supply-side measures whose benefits are real but slow: privatisation, research grants and freer trade change the economy's productive capacity over years. Matching the timescale in the question to the timescale of the policy is the whole skill being tested.
These questions are drawn from past Cambridge IGCSE papers and filtered to supply-side policy. 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.
These are the errors that cost marks on supply-side policy, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
Confusing supply-side policy with fiscal policy. Both may involve tax changes, but the aim differs: fiscal policy targets demand, supply-side targets capacity.
Claiming supply-side policies fix a recession quickly, their lags are the longest of any policy.
Listing measures without saying how each raises productive capacity.
Ignoring the equity effects of cutting benefits or union power.
Saying privatisation always improves efficiency, without mentioning the risk of a private monopoly.