An economy is experiencing high inflation and a large current account deficit on its balance of payments. Which policy is most likely to reduce both the rate of inflation and the current account deficit?
A rise in personal income tax
A reduction in interest rates
An increase in government spending on infrastructure
A depreciation of the exchange rate
327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.