Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

A government chooses to adopt a more deflationary fiscal policy together with a more reflationary monetary policy. Which mix of changes in policy instruments would match this?

  • Agovernment expenditure decrease; interest rate decrease; taxation increase
  • Bgovernment expenditure decrease; interest rate decrease; taxation decrease
  • Cgovernment expenditure increase; interest rate increase; taxation decrease
  • Dgovernment expenditure increase; interest rate increase; taxation increase

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