Lesson M3.3.1

M3.3.1 Supply side policy measures and their effectiveness Quiz: OCR Economics, Unit 8

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson M3.3.1, Supply side policy measures and their effectiveness: 20 multiple choice questions for the OCR Economics (H460), Unit 8: Implementing policy, written with Revision Ninja.

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The 20 questions

  1. What is the primary long-run objective of market-based supply-side policies?

    • Increase LRAS
    • Reduce trade surplus
    • Decrease real GDP
    • Increase AD

  2. Which of the following is an interventionist supply-side policy?

    • Privatisation
    • State education spending
    • Tax cuts
    • Deregulation

  3. Which policy is classified as a market-based supply-side measure?

    • Income tax reduction
    • Government training schemes
    • Infrastructure spending
    • Subsidising R&D

  4. How does an increase in labour productivity affect the LRAS curve?

    • Movement downwards
    • Shifts leftwards
    • Movement upwards
    • Shifts rightwards

  5. What term describes removing government regulations to increase market competition?

    • Privatisation
    • Subsidisation
    • Deregulation
    • Nationalisation

  6. According to the Laffer curve, what happens if tax rates exceed the optimal point?

    • Tax revenue doubles
    • Revenue remains constant
    • Tax revenue rises
    • Tax revenue falls

  7. What is the transfer of state-owned assets to the private sector called?

    • Privatisation
    • Deregulation
    • Commercialisation
    • Nationalisation

  8. A government lowers trade tariffs to encourage international competition. What policy type is this?

    • Expansionary monetary
    • Contractionary fiscal
    • Interventionist supply-side
    • Market-based supply-side

  9. What is the main supply-side objective of reducing trade union power?

    • Reduce labour supply
    • Raise unemployment benefits
    • Increase wage costs
    • Increase labour flexibility

  10. A state scheme funds apprenticeship places for young workers. Which factor improves?

    • Human capital
    • Financial capital
    • Physical capital
    • Capital consumption

  11. What short-run macroeconomic disadvantage often arises from income tax cuts?

    • Exports fall immediately
    • Inflation rises rapidly
    • Budget deficit increases
    • LRAS shifts left

  12. How do government retraining schemes specifically help reduce unemployment?

    • Increases frictional unemployment
    • Eliminates real-wage unemployment
    • Cuts cyclical unemployment
    • Cuts structural unemployment

  13. What is a major disadvantage common to most supply-side policies?

    • Guaranteed budget surpluses
    • Immediate demand impact
    • Short time lags
    • Long time lags

  14. How does a successful supply-side policy affect the long-run Phillips curve?

    • Shifts rightwards
    • Movement upwards
    • Becomes horizontal
    • Shifts leftwards

  15. Government grants for research and development aim to directly boost which factor?

    • Import demand
    • Consumer spending
    • Technological progress
    • Interest rates

  16. Which market-based supply-side measure aims to reduce real wage unemployment?

    • Raising corporation tax
    • Increasing union power
    • Increasing benefit payments
    • Lowering minimum wage

  17. Building a new national motorway network is an example of which policy type?

    • Expansionary trade
    • Interventionist supply-side
    • Contractionary monetary
    • Market-based supply-side

  18. On a Keynesian LRAS diagram, supply-side policies shift which section rightwards?

    • Upward-sloping section
    • Entire demand curve
    • Horizontal section
    • Vertical section

  19. Which potential drawback is associated with cutting unemployment benefits?

    • Reduced productive capacity
    • Greater income inequality
    • Lower labour mobility
    • Higher inflation rates

  20. Which type of unemployment is reduced by government subsidies for worker relocation?

    • Structural
    • Cyclical
    • Seasonal
    • Frictional

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