The economy's unemployment rate is 10% and the inflation rate is 1%. The most appropriate policy for the Bank of England to pursue would be to

Question

Quizplus · Accepted Answer

Increasing the money supply can lower interest rates, encouraging borrowing and investment, which can help reduce unemployment. Given the low inflation rate of 1%, there is less concern about inflationary pressures from increasing the money supply.

The Economy's Unemployment Rate Is 10% and the Inflation Rate