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What was the main policy measure used during the UK's ERM membership in the late 1980s to control inflation?
  • a)
    Monetary policy adjustments.
  • b)
    Fiscal policy adjustments.
  • c)
    Exchange rate depreciation.
  • d)
    Supply-side policy reforms.
Correct answer is option 'A'. Can you explain this answer?
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What was the main policy measure used during the UK's ERM membership i...
During the UK's membership in the ERM (Exchange Rate Mechanism), the main policy measure used to control inflation was monetary policy adjustments. The UK aimed to maintain a strong exchange rate by raising interest rates to attract foreign capital and prevent excessive inflation. However, this policy led to high-interest rates and contributed to a recession.
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What was the main policy measure used during the UK's ERM membership in the late 1980s to control inflation?a)Monetary policy adjustments.b)Fiscal policy adjustments.c)Exchange rate depreciation.d)Supply-side policy reforms.Correct answer is option 'A'. Can you explain this answer?
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