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Economics (AS & A Level) · May / June 2024 · Paper 11 · Question 20

9708Monetary policy

To counter deflation a central bank uses expansionary monetary policy. What is likely to result?

  1. Aa higher cost of borrowing
  2. Ban increase in aggregate demand
  3. Can appreciation of the exchange rate
  4. Dan increase in government debt

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Correct answer: B. an increase in aggregate demand

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