Which one of the following policy measures is most likely to reduce a deflationary (negative) output gap in a domestic economy?
An increase in
value-added tax (VAT)
government contributions to international peacekeeping forces
government investment in national digital infrastructure
the base interest rate by the central bank
52 exam-style questions on Edexcel A A Level Economics 2.6 Macroeconomic objectives and policies, covering 2.6.1 Possible macroeconomic objectives, 2.6.2 Demand-side policies, 2.6.3 Supply-side policies, and 2.6.4 Conflicts and trade-offs between objectives and policies. Each one has a worked solution and a mark scheme showing where the marks go.