Economics (AS & A Level) · Oct / Nov 2021 · Paper 33 · Question 30

The Consumer Prices Index (CPI) fell by 3% in a year. Unemployment was regarded as unacceptably high. Which combination of policies would a government be most likely to adopt in such circumstances?

1. Aan appreciation of the currency, together with an increase in the rate of interest
2. Bincreased government expenditure on education, together with an increase in taxes to pay for it
3. Cincreased indirect taxes, together with a depreciation in the exchange rate
4. Dreduced income taxes, together with a cut in the rate of interest

As printed in the paper