Economics 9708 · AS & A Level · Externalities

Externalities — practice question

Which statement would be accepted by both Keynesian and Monetarist schools of thought?

  • 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.

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