JAMB - Economics (2023 - No. 44)
Identify one of the following which can NOT be used to close deflationary gap
Increased interest rate
Increased money supply
Increase government expenditure
Reduction in taxes
Explanation
- Monetary policy is implemented by reducing the interest rates in the economy in order to increase the supply of money to enhance growth.
- The fiscal policy is implemented by the reduction of taxes and increasing government spending in order to boost demand.
- Policymakers may choose to implement a stabilization policy to close the recessionary gap and increase real GDP.
- The fiscal policy is implemented by the reduction of taxes and increasing government spending in order to boost demand.
- Policymakers may choose to implement a stabilization policy to close the recessionary gap and increase real GDP.
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