Economics (AS & A Level) · May / June 2026 · Paper 11 · Question 23
9708Price stability
What is a reason for a government policy that aims at achieving a low and stable rate of inflation?
- AConsumers are encouraged to increase spending on imports.
- BFirms are encouraged to increase the level of production.
- CThe central bank is encouraged to increase the interest rate.
- DThe government is encouraged to increase the rate of income tax.
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Correct answer: B. Firms are encouraged to increase the level of production.
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