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4 marksUnemployment and Inflation

CAPE Economics Unit 2 · 2015 · Paper 2 · Question 4(c)(ii)

With the use of a labelled Phillips curve, explain how the use of fiscal and monetary policies to solve problems of inflation and unemployment can further compound the problems.

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Other parts of this question

  1. 4(a)(i)Define the term 'fiscal policy'.[2 marks]
  2. 4(a)(ii)Explain, using TWO examples, the term 'automatic stabilizers'.[5 marks]
  3. 4(a)(iii)Distinguish between 'discretionary fiscal policy' and 'non-discretionary fiscal policy'.[4 marks]
  4. 4(b)(i)Analyse how monetary policy can be used to address the problem of recession or slow growth.[4 marks]
  5. 4(b)(ii)Analyse how monetary policy can be used to address inflation.[4 marks]
  6. 4(c)(i)Define the term 'stagflation'.[2 marks]

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