Lesson M3.4.1

M3.4.1 Conflicts and trade-offs between policy objectives Quiz: OCR Economics, Unit 8

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson M3.4.1, Conflicts and trade-offs between policy objectives: 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 curve illustrates the short-run trade-off between unemployment and inflation?

    • Kuznets curve
    • Phillips curve
    • Lorenz curve
    • Laffer curve

  2. Which macroeconomic policy conflict typically arises when aggregate demand increases rapidly?

    • Fiscal vs monetary
    • Growth vs inflation
    • Inequality vs poverty
    • Unemployment vs inflation

  3. What conflict arises when high domestic consumer expenditure increases import spending?

    • Equity vs efficiency
    • Inflation vs deflation
    • Saving vs investment
    • Growth vs trade balance

  4. Which policy trade-off is described by the short-run Phillips curve?

    • Inflation vs unemployment
    • Exports vs imports
    • Growth vs debt
    • Taxation vs spending

  5. What long-run curve suggests there is no permanent trade-off between inflation and unemployment?

    • Aggregate supply curve
    • Long-run Phillips curve
    • Short-run Phillips curve
    • Laffer curve

  6. Which concept describes a period of high inflation combined with high unemployment?

    • Deflation
    • Stagflation
    • Disinflation
    • Hyperinflation

  7. What trade-off often arises when deregulation is used to improve supply-side efficiency?

    • Saving vs investment
    • Growth vs inflation
    • Imports vs exports
    • Efficiency vs protection

  8. Which curve demonstrates the trade-off between income tax rates and total tax revenue?

    • Phillips curve
    • Laffer curve
    • Gini curve
    • Lorenz curve

  9. If a central bank raises interest rates to lower inflation, what short-run trade-off occurs?

    • Lower trade deficit
    • Higher inflation
    • Higher economic growth
    • Lower economic growth

  10. A government uses expansionary fiscal policy to reduce unemployment. What is a likely negative side effect?

    • Increased exchange rate
    • Decreased national debt
    • Increased demand-pull inflation
    • Lower trade deficit

  11. If a government increases progressive taxation to reduce inequality, what potential trade-off may arise?

    • Increased export volume
    • Lower national debt
    • Higher price stability
    • Reduced work incentives

  12. A country tries to boost economic growth through heavy industrialisation. Which main trade-off occurs?

    • Deflationary pressure
    • Environmental degradation
    • Lower import spending
    • Decreased income inequality

  13. What fiscal problem typically results from heavy welfare spending to reduce poverty?

    • Surplus balance of payments
    • Higher public budget deficit
    • Decreased money supply
    • Lower national debt

  14. A government devalues its currency to boost exports. What short-run trade-off does it face?

    • Lower import prices
    • Lower aggregate demand
    • Higher import-led inflation
    • Higher unemployment

  15. Raising interest rates to curb inflation strengthens the exchange rate. What conflict does this create?

    • Cheaper domestic exports
    • Higher import prices
    • Increased export volume
    • Reduced export competitiveness

  16. Cutting state benefits to encourage work creates a trade-off between efficiency and which objective?

    • Income equality
    • Price stability
    • Fiscal budget balance
    • Balance of payments

  17. What policy dilemma arises when monetary policy tries to fix cost-push inflation using rate hikes?

    • Deeper economic recession
    • Higher export growth
    • Lower unemployment
    • Increased trade surplus

  18. How does implementing supply-side policies reduce the trade-off between growth and inflation?

    • Shifts AD leftwards
    • Shifts LRAS rightwards
    • Shifts SRAS leftwards
    • Shifts AD rightwards

  19. Why does the conflict between growth and the balance of payments worsen during consumer-led booms?

    • High import propensity
    • Low saving propensity
    • Low interest rates
    • High export propensity

  20. Which combination of policies can reduce both unemployment and inflation without causing trade-offs?

    • Expansionary fiscal policy
    • Supply-side policies
    • Contractionary monetary policy
    • Protectionist tariffs

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