Economics (AS & A Level) · May / June 2021 · Paper 33 · Question 28
9708Government macroeconomic policy objectives
Which statement would both Keynesian and Monetarist schools of thought accept?
- AHigh inflation and high unemployment are undesirable in a properly-functioning economy.
- BIncreased government spending on investment projects will always crowd out private investment.
- CThe best way for an economy to get out of a recession is for the government to increase its expenditure.
- DThe most effective way to reduce inflation is for the government to exercise tight control over the money supply.
As printed in the paper
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Correct answer: A. High inflation and high unemployment are undesirable in a properly-functioning economy.
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