A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Oct/Nov 2025 · Q231 Mark
A country has a target rate of inflation of 2.5% and has recently experienced the actual rate rising to 6%, with unemployment falling to very low levels. Which policy option is most likely to be implemented?
Aan increase in government expenditure on training
Ban increase in indirect taxes on demerit goods
Can increase in import tariffs
Dan increase in interest rates
✓ Correct answer
D: an increase in interest rates
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