CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 82 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 82
Topic #: 1

[All CIMAPRA17-BA1-1 Questions]

Which of the following is an example of reflationary monetary policy?

ALowering interest rates in order to boost the economy during a recession.

BIntroducing a tax on financial transactions in order to reduce the volume of speculative transactions

CIncreasing investment in education in order to improve the long term competitiveness of the economy

DReducing government expenditure in order to rem in a budget deficit

Show Suggested Answer

Suggested Answer: A

by Larae at Mar 09, 2024, 10:02 AM

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Minna

6 months ago

Hmm, that makes sense. Maybe I was mistaken. Thanks for clarifying!

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Maryln

6 months ago

I see your point, Rodrigo. Lowering interest rates can stimulate spending and investment, which is needed during a recession.

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Rodrigo

6 months ago

But doesn't reflationary policy aim to boost short-term demand by increasing money supply?

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Minna

6 months ago

I disagree, I believe it's C) Increasing investment in education for long term competitiveness.

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Rodrigo

6 months ago

I think the answer is A) Lowering interest rates during a recession.

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Penney

7 months ago

Hmm, that makes sense. Maybe I was mistaken. Thanks for clarifying!

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Lucina

7 months ago

I see your point, Chara. Lowering interest rates can stimulate spending and investment, which is needed during a recession.

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Chara

7 months ago

But doesn't reflationary policy aim to boost short-term demand by increasing money supply?

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Penney

7 months ago

I disagree, I believe it's C) Increasing investment in education for long term competitiveness.

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Chara

7 months ago

I think the answer is A) Lowering interest rates during a recession.

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