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2.4 Financial markets and monetary policy (A-level only)

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Question 1

Which of the following is a clear example of moral hazard arising from regulatory policies or central bank interventions in the financial sector?

A

Insufficient disclosure requirements leading to consumers buying unsuitable pension plans.

B

Commercial banks offering fewer loans to small businesses due to increased capital adequacy ratios.

C

Financial institutions undertaking high-risk investment activities because they expect the central bank to act as a lender of last resort.

D

Regulators capping interest rates on payday loans to protect vulnerable borrowers from predatory lending.

Markscheme

2.4 Financial markets and monetary policy (A-level only) Questions

  1. A Level
  2. /Economics
  3. /2.4 Financial markets and monetary policy (A-level only)

176 exam-style questions on AQA A Level Economics 2.4 Financial markets and monetary policy (A-level only), covering 2.4.1 The structure of financial markets and financial assets, 2.4.2 Commercial banks and investment banks, 2.4.3 Central banks and monetary policy, and 2.4.4 The regulation of the financial system. Each one has a worked solution and a mark scheme showing where the marks go.

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