Under which of the following macroeconomic conditions will a market-based supply-side policy be least effective in increasing actual real GDP in the short run?
When there is a high marginal propensity to import
When the economy is experiencing a deep recession with a significant negative output gap
When the central bank reduces the base interest rate close to the liquidity trap level
When there is a high level of structural unemployment in the economy
37 exam-style questions on OCR A Level Economics Supply side policy. Each one has a worked solution and a mark scheme showing where the marks go.