A-LevelEconomicsGovernment macroeconomic intervention9708/12 · May/June 2019 · Q291 Mark
An economy is currently in the position PY shown on the diagram. Which short-run effects is government spending on education likely to have on unemployment and inflation?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
Aunemployment: fall, inflation: fall
Bunemployment: fall, inflation: rise
Cunemployment: rise, inflation: fall
Dunemployment: rise, inflation: rise
✓ Correct answer
B: unemployment: fall, inflation: rise
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