The Organisation for Economic Co-Operation and Development (OECD) Summary Forecast

question 39

Multiple Choice

The Organisation for Economic Co-operation and Development (OECD) summary forecast for the UK states that above-target inflation will hold back private consumption and public spending. Given this information, which of the following is likely to be true for the UK economy?

• A) The government is likely to buy more hospitals and schools and employ nurses and teachers in the near future.
• B) Interest rates in the UK need to be reduced in order to increase private consumption.
• C) The aggregate supply curve in the economy is likely to be vertical.
• D) The UK economy is likely to move to an inflationary recession.

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