A government expands a busy freight port so that firms can move more goods each year. Total spending in the economy is forecast to keep rising. How could the port expansion help to support price stability?
By reducing total spending, so that demand stays below the economy's capacity
By adding construction spending now, which lowers the general price level this year
By cutting interest rates, so that firms can borrow more cheaply to expand
By letting output rise further before spending runs into the economy's capacity limit
121 exam-style questions on OCR GCSE Economics 3.7 Supply side policies, covering 3.7.1 What are supply side policies and 3.7.2 Costs and benefits of supply side policies. Each one has a worked solution and a mark scheme showing where the marks go.