Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

The diagram illustrates the AD / AS curves for an economy. Which policy would lower the price level from P1 to P2, as shown?

  • Adepreciating the currency to make imports more expensive
  • Bimposing tariffs on imports to encourage expenditure switching
  • Cincreasing labour productivity through training
  • Draising sales taxes on goods to discourage consumption

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