Economics 9708 · AS & A Level · Market failure

Market failure — practice question

To raise the level of employment during the boom phase of the trade cycle, a government adopts an expansionary economic policy. What accounts for the economy overheating as a result?

  • Athe emergence of supply bottlenecks
  • Bthe Laffer curve principle
  • Cthe operation of automatic stabilisers
  • Dthe underemployment of labour

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