O-LevelEconomicsGovernment and the macroeconomy2281/12 · May/June 2025 · Q41 Mark
What are both macroeconomic decisions?
Aschool recruits more teachers; a firm sets the prices for its products
Bcentral bank reduces money supply; a government spends more on defence
Cgovernment increases tax rates; a farmer decides which crops to grow
Dhousehold cuts its energy use; a worker accepts an offer of overtime
✓ Correct answer
B: central bank reduces money supply; a government spends more on defence
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