Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

The table presents the consumer prices index (CPI) for an economy as index numbers (2016 100; 2017 103; 2018 101; 2019 97). Which action is the government most likely to take in order to achieve price stability?

  • Aappreciate the exchange rate
  • Bdecrease the budget deficit
  • Cincrease the money supply
  • Dincrease the rate of interest

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI