In 2015 a political party proposed a policy of quantitative easing (the creation of money by the central bank). When would such a policy be least likely to destabilise the macro economy in the short run?
- (a)In 2015 a political party proposed a policy of quantitative easing (the creation of money by the central bank). When would such a policy be least likely to destabilise the macro economy in the short run? A when the economy was experiencing a high level of inflation B when the economy had price stability but there was full employment of the labour force C when there existed a deep recession with high levels of unemployment D when there was full employment and a current account balance of payments deficit[1]
Mark scheme
Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.
- [1] Answer: C
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