A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Oct/Nov 2018 · Q301 Mark
Which policy mix is most likely to be effective in the short run for reducing inflation in a closed economy? [Table: fiscal policy, monetary policy A decreasing the budget surplus, increasing the interest rate B decreasing the budget surplus, increasing the money supply C increasing the budget surplus, increasing the interest rate D increasing the budget surplus, increasing the money supply]
Afiscal policy: decreasing the budget surplus, monetary policy: increasing the interest rate
Bfiscal policy: decreasing the budget surplus, monetary policy: increasing the money supply
Cfiscal policy: increasing the budget surplus, monetary policy: increasing the interest rate
Dfiscal policy: increasing the budget surplus, monetary policy: increasing the money supply
✓ Correct answer
C: fiscal policy: increasing the budget surplus, monetary policy: increasing the interest rate
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