Practise distinguishing expansionary from contractionary monetary policy by tracing changes in interest rates and money supply in CAIE Economics AS questions.
In recent years an economy has experienced changes in its price level as shown.
Which government policy is most effective in reversing the trend shown in the price level?
encourage firms to expand production through tax incentives
introduce an incomes policy to directly control wage increases
promote household savings by advertising saving schemes
reduce interest rates and increase money supply