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

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Question 37

To curb rising demand-pull inflation, a central bank decides to adopt a contractionary monetary policy stance. Which of the following combinations of central bank asset transactions, changes in market interest rates, and impacts on the external value of the domestic currency is consistent with this policy?

A

Selling government bonds, rising market interest rates, and an appreciating currency

B

Buying government bonds, falling market interest rates, and a depreciating currency

C

Selling government bonds, falling market interest rates, and an appreciating currency

D

Buying government bonds, rising market interest rates, and a depreciating currency

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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