CIMAPRA17-BA1-1 Exam - Topic 4 Question 117 Discussion

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

Question #: 117
Topic #: 4

[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 Lizbeth at Oct 27, 2025, 04:27 PM

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Huey

2 months ago

True, but C isn't monetary policy. A directly affects money supply.

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Caprice

2 months ago

C) sounds good for the long term, but not reflationary, right?

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Lauran

2 months ago

B) and D) are not reflationary at all.

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Johnson

2 months ago

Wait, can lowering interest rates really fix a recession?

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Katy

2 months ago

Totally agree, lowering interest rates helps stimulate spending.

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Lang

2 months ago

A) all the way. Lowering rates is the way to go when you need some reflation.

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Penney

3 months ago

I'd go with A. Gotta get that economy moving again!

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Raylene

3 months ago

Definitely A. Reducing interest rates is a classic reflationary policy.

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Louis

3 months ago

A) Lowering interest rates to boost the economy during a recession. That's the one!

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Florinda

3 months ago

I feel like I might be mixing up terms, but isn't reflationary policy supposed to increase spending? So A sounds correct, but I’m not 100% sure.

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Gerald

3 months ago

This question reminds me of a practice one we did on economic policies. I think A is definitely the best answer here.

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Arminda

3 months ago

I'm not entirely sure, but I remember something about tax policies being more fiscal than monetary.

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Heidy

4 months ago

But what about C? Investing in education is also important for growth.

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Hermila

4 months ago

A) is definitely reflationary!

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Olive

4 months ago

I think A is the right answer. Lowering interest rates helps stimulate spending.

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Pete

4 months ago

Haha, D) Reducing government spending to reduce a deficit? That's like trying to lose weight by cutting off your own leg.

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Lisha

4 months ago

Agreed! A makes sense for reflation during a recession.

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Kerry

5 months ago

I think reflationary monetary policy is about stimulating the economy, so lowering interest rates seems like the right choice.

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Marleen

5 months ago

Hmm, I'm not 100% confident, but I'm leaning towards A. Lowering rates to boost the economy during a recession seems like a classic reflationary move to me.

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Pa

5 months ago

I remember learning about this in class. Reflationary policy is all about expanding the money supply to stimulate growth. So I think A is the best answer here.

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