Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

Which combination of monetary policy and fiscal policy is most likely to be the most effective for a government in tackling deflation?

  • Amonetary: increasing interest rates; fiscal: contractionary
  • Bmonetary: increasing interest rates; fiscal: expansionary
  • Cmonetary: reducing interest rates; fiscal: contractionary
  • Dmonetary: reducing interest rates; fiscal: expansionary

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