A-LevelEconomicsGovernment macroeconomic intervention9708/12 · May/June 2018 · Q301 Mark
In an economy, prices are rising. The government wishes to limit further increases in prices. Which policies would it be likely to use?
Adecrease goods and services (sales) tax and put a quota on cheap imports
Bdecrease income tax and decrease interest rates
Cincrease interest rates and decrease government spending
Dwithdraw industry subsidies and impose a minimum wage
✓ Correct answer
C: increase interest rates and decrease government spending
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