Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

Sweden recorded a Consumer Prices Index (CPI) movement of –0.6%. Which mix of policies could its government adopt to bring back price stability?

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

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