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Economics · Oct / Nov 2019 · Paper 12 · Question 18

2281Monetary policy

Which combination of policy measures would be effective in reducing the effects of a recession?

  1. Aa reduction in interest rates and a reduction in income tax
  2. Ba reduction in interest rates and an increase in income tax
  3. Can increase in interest rates and a reduction in income tax
  4. Dan increase in interest rates and an increase in income tax

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Correct answer: A. a reduction in interest rates and a reduction in income tax

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