Economics 9708 · AS & A Level · Externalities

Externalities — practice question

Which combination of macroeconomic policies would be most likely to succeed if the objective were to cut unemployment and lower inflation?

  • Acontractionary supply-side policies and higher interest rates
  • Bexpansionary supply-side policies and reduced indirect taxes
  • Cincreased direct taxes and reduced indirect taxes
  • Dreduced rates of interest and depreciation of exchange rate

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