There are various possible ways the UK government and/or central bank might intervene to try to...
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There are various possible ways the UK government and/or central bank might intervene to try to reduce inflation, including the following four policies. For each of these actions (a) to (d) below, explain how it is thought to control inflation; assess whether or not it is likely to be effective in reducing inflation; and discuss possible undesirable side- effects on the UK economy. Your answers should mention different economic schools of thought. a) Varying the amount of notes & coins in the economy (25 marks) b) Causing a recession (25 marks) c) Raising unemployment (25 marks) d) Changing exchange-rates between the UK £ and other currencies (25 marks) There are various possible ways the UK government and/or central bank might intervene to try to reduce inflation, including the following four policies. For each of these actions (a) to (d) below, explain how it is thought to control inflation; assess whether or not it is likely to be effective in reducing inflation; and discuss possible undesirable side- effects on the UK economy. Your answers should mention different economic schools of thought. a) Varying the amount of notes & coins in the economy (25 marks) b) Causing a recession (25 marks) c) Raising unemployment (25 marks) d) Changing exchange-rates between the UK £ and other currencies (25 marks)
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