For the following changes in the economic environment, say whether each of the changes is most…

For the following changes in the economic environment, say
whether each of the

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changes is most likely to be inflationary or deflationary.


A cut in the basic rate of income tax (reduced fiscal pressure).


An increase in interest rates (increased monetary pressure).


A decrease in unemployment.


A cut in government spending (increased fiscal pressure).


Devaluation of the domestic currency.

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