Economics 9708 · syllabus 10
Cambridge A Level Economics 9708 — Government macroeconomic intervention (A Level) topical past papers
Whether policy can meet every macroeconomic objective at once: the links and conflicts between them, the Phillips curve, and how effective each policy is.
- Questions
- 454
- Years
- 2002–2026
- With mark scheme
- 100%
- Questions 2022–2026
- 169
Anyone can browse these pages. Opening the questions and their mark schemes takes a free Momentum account.
What Government macroeconomic intervention (A Level) covers
At A Level the objectives are treated together. Governments want sustainable growth, low unemployment, stable prices and a sustainable balance of payments, and often a fairer distribution of income and a protected environment too, but the objectives are linked and often conflict. Rapid growth can raise inflation and draw in imports; inflation above that of trading partners makes exports less competitive and tends to weaken a floating currency, which in turn raises import prices. That is the link between the internal value of money, what it buys at home, and its external value, the exchange rate.
The Phillips curve describes the relationship between unemployment and inflation. The original curve suggested a stable trade-off, so that lower unemployment could be bought with higher inflation. The expectations-augmented view holds that the trade-off lasts only in the short run: once workers expect the higher inflation and bargain for higher wages, unemployment returns to its natural rate with inflation higher than before, so the long-run Phillips curve is vertical at the natural rate.
Judging policy is the heart of the topic. Fiscal, monetary, supply-side and exchange rate policies act on different objectives over different time scales, and how well they work depends on the amount of spare capacity, the confidence of households and firms, how open the economy is, the size of its debt and how credible the authorities are. Governments can fail here too, through poor forecasts, time lags that make a policy arrive when it is no longer needed, and political pressure. This is A Level content, examined on Papers 3 and 4, and it draws on the whole of the macroeconomics course.
In the syllabus
The headings this topic has in the Cambridge International 2026–2028 syllabus, as the board prints them.
- 10 Government macroeconomic intervention (A Level)
- 10.1 Government macroeconomic policy objectives
- 10.2 Links between macroeconomic problems and their interrelatedness
- 10.3 Effectiveness of policy options to meet all macroeconomic objectives
What you should be able to do
- Explain the links between growth, unemployment, inflation and the balance of payments, including the internal and external value of money
- Draw and explain short-run and long-run Phillips curves and the role of expectations
- Identify conflicts between objectives and explain how a policy aimed at one can harm another
- Evaluate the effectiveness of fiscal, monetary, supply-side and exchange rate policies in meeting each objective
- Explain the causes of government failure in macroeconomic policy, including time lags and poor information
- Recommend and justify a combination of policies for an economy described in data
Key ideas
- Short-run Phillips curve: an inverse relationship between unemployment and inflation for a given expected rate of inflation
- Long-run Phillips curve: vertical at the natural rate of unemployment, once expectations have adjusted
- Internal value of money: what a unit of currency buys at home, which falls as prices rise; external value: the exchange rate
- Policy lags: recognising a problem, deciding on a response and the response taking effect all take time
- Common conflicts: growth against price stability, low unemployment against low inflation in the short run, and growth against the current account and the environment
How Government macroeconomic intervention (A Level) has been examined
From 2022 to 2026, Government macroeconomic intervention (A Level) was on Paper 4 · A Level Data Response and Essays in 14 of 14 exam series, worth about 24% of that paper’s marks.
| Paper | Questions | Share of marks | Series |
|---|---|---|---|
| Paper 3 · A Level Multiple Choice | 124 | 12% | 14 of 14 |
| Paper 4 · A Level Data Response and Essays | 45 | 24% | 14 of 14 |
Momentum’s own count, over the questions in its bank for these years: a series is one exam session, every zone included, and a question filed under two chapters counts in both. Median marks per question: 1. The bank files this topic together with neighbouring ones, so these figures count every question in its chapters, including some on those topics.
Filed in Momentum under: Government Macro Intervention.
Mistakes that cost marks
- Presenting the Phillips curve as a permanent trade-off — in the expectations-augmented view, holding unemployment below its natural rate raises inflation without a lasting fall in unemployment
- Moving along the short-run Phillips curve when expected inflation changes — a rise in expected inflation shifts the curve upwards; movements along it come from changes in AD
- Recommending policies without matching them to the cause — cost-push inflation and structural unemployment call for different policies from demand-pull inflation and cyclical unemployment
- Claiming one policy can meet every objective — a single instrument such as the interest rate usually trades one objective against another, which is why governments combine policies
- Ending an essay with ‘it depends’ and nothing more — the conclusion has to say what it depends on and which way the judgement falls for the economy in the question
Exam technique
- In Paper 3, trace a policy through to every objective before choosing: a rise in interest rates lowers inflation, but it can also slow growth, raise unemployment and, by strengthening the currency, worsen the current account
- In data-response answers, identify which objectives the figures show being missed and by how much, and use that to decide which problem a policy should address first
- In essays, compare at least two policies for the same problem and reach a justified judgement: which works better here, over what time frame and at what cost to other objectives
- Draw the Phillips curve with the inflation rate on the vertical axis and unemployment on the horizontal, and mark the natural rate where the long-run curve meets the horizontal axis
Practising in Momentum
- Every question in a chapter as one list, from every paper and year in the bank, newest first or shuffled.
- Each question turns over to its own part of the mark scheme, where the board published one.
- Narrow by paper, year, session, zone and marks, and star the questions worth keeping.
- Pick chapters, a number of questions and a time, and the exam builder draws a mock to sit and mark.
Past-paper questions and mark schemes are the copyright of Cambridge International. Momentum shows them to signed-in learners for revision and does not publish them on these pages.