Which of the following policy combinations is most likely to cause a contraction in actual economic growth in the short run, whilst facilitating an increase in the economy’s long-run trend rate of economic growth?
A reduction in the central bank's base interest rate combined with an increase in tariffs on imported raw materials
A decrease in corporation tax rates funded by a reduction in government capital expenditure on transport infrastructure
An increase in the basic rate of personal income tax alongside an expansion of government-funded research and development (R&D) tax credits
A depreciation of the exchange rate accompanied by a nationwide increase in the national minimum wage
21 exam-style questions on OCR A Level Economics Economic growth. Each one has a worked solution and a mark scheme showing where the marks go.