A-LevelEconomicsMacroeconomic Policies (Deflation)Feb/Mar 2016Paper 1 Q301 Mark
In March 2014, Sweden had a change in its Consumer Price Index of -0.6%. Which combination of policies might the government use to restore price stability?
Aincrease interest rates and increase indirect taxes
Bincrease interest rates and reduce government expenditure
Creduce government spending and increase income tax
Dreduce interest rates and increase government expenditure
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of macroeconomic policies (deflation) within the Economicssyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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