Q13 · Practice questionSimple familiar1 mark
QUESTION 13
Without a new government decision, unemployment-benefit payments rise during a downturn. This is an example of
(A)
discretionary fiscal expansion.
(B)
contractionary monetary policy.
(C)
a supply-side deregulation policy.
(D)
an automatic stabiliser.
WORKED SOLUTION
1 markAnswer D
Answer
D
Working
Existing eligibility rules increase transfers as unemployment rises. This supports household income and dampens the fall in demand without a new discretionary policy decision.
Marking criteria
- Select D. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabus