An economy is experiencing high cyclical unemployment alongside a persistent surplus on the current account of its balance of payments.
Which one of the following policy measures is most likely to reduce unemployment while also helping to reduce the current account surplus?
An increase in the central bank's base interest rate
An appreciation of the currency's exchange rate
An increase in the standard rate of income tax
An increase in government spending on infrastructure
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.