The Role of Government (Cambridge (CIE) IGCSE Economics)

Exam Questions

54 mins26 questions
1
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1 mark

What is a common role of local government?

  • Monitoring international trade

  • National defense and security

  • Provision of public goods like refuse collection

  • Monetary policy 

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2
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What are the three levels of government intervention in a mixed economy?

A

Local

Supply Side

International

B

Local

National

Monetary

C

International

Exchange rates

Local

D

International

Local

National

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    3
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    What is the aim of protectionism?

    • To promote free trade 

    • To encourage good international relations

    • To restrict foreign competition

    • To reduce government intervention in trade

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    4
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    What is the main purpose of fiscal policy?

    • Regulating the money supply and interest rates

    • Influencing economic activity through government spending and taxation

    • Managing the exchange rate of the national currency

    • Allocating resources to local projects

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    5
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    Which of the following is not an example of a macroeconomic aim from a national government?

    • Economic growth

    • Low and stable inflation rate

    • Better international trade with other countries

    • Low unemployment

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    11 mark

    What is most likely to be the responsibility of a central government?

    • the provision of immigration officials at an airport

    • the provision of security cameras in a shopping centre

    • the provision of security staff at a bank

    • the provision of ticket inspectors on a train

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    21 mark

    In a city, what is most unlikely to be provided by the private market system?

    • a museum

    • a school

    • a sports field

    • street lights

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    3
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    What is a characteristic of a mixed economy?

    • Government has complete control over all economic activities

    • Private ownership and government intervention exist together

    • All production is carried out by foreign companies

    • Government sets prices for all goods and services

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    4
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    Which term below does not describe a local government branch?

    • State

    • National

    • Council

    • Federal

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    5
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    What is the role of local government in promoting economic development?

    • Setting national tax rates

    • Implementing international trade agreements

    • Providing incentives for local businesses

    • Managing the national budget

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    1
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    What is an exchange rate intervention by the government?

    • A government policy that promotes trade barriers

    • A decision to adopt a fixed exchange rate system

    • A deliberate action to influence the value of the national currency

    • A measure to stop all foreign exchange transactions

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    2
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    Why does the government provide public goods and services in a mixed economy?

    • To stop private ownership of key industries

    • To ensure that all goods are provided for free

    • To solve market failures and provide essential services

    • To discourage private individuals from participating in the economy

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    3
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    What is the main source of government revenue in a mixed economy?

    • Private investments in all industries

    • Subsidies provided to domestic businesses

    • Taxes collected from individuals and businesses

    • Export earnings from international trade

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    4
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    What is a common method of protecting domestic firms?

    • Removing all trade barriers and tariffs

    • Encouraging foreign investment without any restrictions

    • Providing financial assistance to foreign competitors

    • Imposing tariffs and quotas on imported goods

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    5
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    What is the purpose of government regulation in a mixed economy?

    • To eliminate all competition 

    • To ensure equal distribution of income

    • To protect consumers, workers, and maintain fair competition

    • To control all aspects of production and pricing

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