Economics (AS & A Level) · May / June 2025 · Paper 31 · Question 23

An economy is at its natural rate of unemployment. Under which circumstances will an increase in government spending aimed at reducing unemployment be most likely to conflict with a government's objective of low inflation?

1. Aif inflationary expectations are unchanged
2. Bif inflationary expectations fall
3. Cif labour productivity increases
4. Dif labour supply increases

As printed in the paper