A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Feb/Mar 2016 · 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
D: reduce interest rates and increase government expenditure
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