Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

During March 2014, Sweden recorded a change of –0.6% in its Consumer Price Index. Which mix of policies could the government adopt to bring back price stability?

  • Aincrease interest rates and increase indirect taxes
  • Bincrease interest rates and reduce government expenditure
  • Creduce government spending and increase income tax
  • Dreduce interest rates and increase government expenditure

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