A political party put forward a policy of quantitative easing (the creation of money by the central bank). In which situation would this policy be least likely to destabilise the macroeconomy in the short run?
- Awhen the economy was experiencing a high level of inflation
- Bwhen the economy had price stability but there was full employment of the labour force
- Cwhen there was a deep recession with high levels of unemployment
- Dwhen there was full employment and a current account balance of payments deficit