A Level Economics AQA Practice Exam

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Study effectively for the A Level Economics AQA Exam. Utilize our quiz that includes multiple-choice questions, detailed explanations, and hints to help reinforce your understanding. Prepare yourself with the right knowledge and skills to excel in your exam!

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Which of the following describes the effect of excessive administration costs?

Improved efficiency of government programs
Higher taxes for the general public
Potential to contribute to government failure
Increased consumer satisfaction

The correct answer is: Potential to contribute to government failure

The choice highlighting the potential for excessive administration costs to contribute to government failure is accurate because high administrative costs can lead to inefficiencies in government programs. When a significant portion of resources is consumed by administrative processes rather than directed towards their intended purposes, it can hinder the effectiveness of public initiatives. This misallocation of resources may result in negative outcomes for society, leading to government failure, where the government is unable to meet its objectives or appropriately address social needs. In contrast, higher taxes for the general public may arise as a response to funding challenges but are not a direct effect of excessive administration costs alone. Improved efficiency of government programs and increased consumer satisfaction are also unlikely to result from excessive costs; rather, they suggest a well-functioning system, which contradicts the implications of high administrative expenditures.