A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Oct/Nov 2020 · Q281 Mark
A government uses monetary policy and fiscal policy to solve a problem of deflation. Which policy combination is likely to be the most successful?
Aincreasing interest rates, contractionary
Bincreasing interest rates, expansionary
Creducing interest rates, contractionary
Dreducing interest rates, expansionary
✓ Correct answer
D: reducing interest rates, expansionary
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