Cambridge International (CAIE) · 5 Government macroeconomic intervention (AS) · 5.2 Fiscal policy

Cambridge International (CAIE) Economics past paper questions: Fiscal policy

Every Cambridge International (CAIE) question on Fiscal policy from 2023 to 2025: 2 essays, 3 data response questions and 5 multiple choice questions. It covers 4.6 Price stability, 2.4 The interaction of demand and supply, 2.2 Price elasticity, income elasticity and cross elasticity of demand, 4.5 Unemployment and 5.3 Monetary policy. Each question links to its paper, mark scheme and examiner report.

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Subtopics4.6 Price stability 22.4 The interaction of demand and supply 12.2 Price elasticity, income elasticity and cross elasticity of demand 14.5 Unemployment 15.3 Monetary policy 14.3 Aggregate demand and aggregate supply analysis 1

Essay questions on fiscal policy

AS Paper 2, June 2025, Q4(b)OptionalAssess12 marks

Assess the extent to which using fiscal policy would be the best way to reduce a high rate of inflation.

Question paper p.4 Mark scheme p.19 Open in the tool Practise the AD/AS diagram

AS Paper 2, March 2025, Q5(a)OptionalExplain8 marks

With the help of an AD/AS diagram, explain what is meant by an expansionary fiscal policy and consider the extent to which an expansionary fiscal policy will always increase the level of aggregate demand.

Question paper p.4 Mark scheme p.18 Examiner report p.5 Open in the tool Draw it: AD/AS diagram

Data response questions on fiscal policy

AS Paper 2, June 2023, Q1(a)Compare2 marks

Case study: Is Nigeria being held back by its dependence on oil and gas?

Compare the government budget balance of Nigeria in 2016 with the government budget balance in 2020.

Question paper p.3 Mark scheme p.7 Examiner report p.9 Open in the tool

AS Paper 2, June 2023, Q1(e)Assess6 marks

Case study: Is Nigeria being held back by its dependence on oil and gas?

Assess whether adjusting the collection of direct tax or indirect tax is likely to be more effective in increasing the tax revenue collected by the Nigerian government.

Question paper p.3 Mark scheme p.9 Examiner report p.9 Open in the tool

AS Paper 2, March 2023, Q1(b)Explain2 marks

Case study: Inflation in the United States (US)

Using the information provided, explain what is meant by ‘the US government’s economic stimulus package’.

Question paper p.3 Mark scheme p.8 Examiner report p.3 Open in the tool

Multiple choice questions

AS Paper 1, November 2025, Q29
What is the effect of a cut in a country‘s income tax rates on its exports and imports?
AS Paper 1, June 2025, Q22
A government increases direct taxation to reduce its budget deficit. How is this likely to affect the government’s ability to achieve its macroeconomic objectives?
AS Paper 1, March 2025, Q22
Which combination of fiscal policy measures will reduce both the inflation rate and income inequality?
AS Paper 1, March 2024, Q20
A government has a balanced budget. It decides to increase its spending by 10%. Which increase in government revenue would produce a budget surplus?
AS Paper 1, March 2023, Q28
What is least likely to rise as a result of the use of expansionary fiscal policy?

Question text is quoted from the question papers, © Cambridge University Press & Assessment (UCLES), for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Essay questions on fiscal policy

Data response questions on fiscal policy

Multiple choice questions

More Cambridge International (CAIE) topics: 5 Government macroeconomic intervention (AS)