ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A government is faced with rising inflation. It wishes to reduce inflationary pressure while avoidinga rise in unemployment.Which action is most likely to meet its needs? OCT/NOV 2016 12
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A an increase in employment taxes
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B an increase in laws to promote competition
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C an increase in the budget surplus
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D an increase in the exchange rate
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Explanation:
Detailed explanation-1: -The production possibility curve (ppc) shows the maximum possible combinations of outputs when an economy operates at full employment. The loss of confidence will prevent money being acceptable and its functions will not operate effectively. This will restrict specialisation and output.
Detailed explanation-2: -Division of Labour further leads to the diversity of occupations which further leads to the employment opportunities. On the other hand, the scale of production being large, the number of employment opportunities also increases.
There is 1 question to complete.