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

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Question 39

The Central Bank lowers interest rates to stimulate aggregate demand. Which one of the following combinations is most likely to reduce the effectiveness of this policy?

Consumer confidenceDirect taxationCredit availability
ARisingFallingIncreasing
BFallingRisingDecreasing
CRisingRisingIncreasing
DFallingFallingDecreasing
A

Consumer confidence: Rising; Direct taxation: Falling; Credit availability: Increasing

B

Consumer confidence: Falling; Direct taxation: Rising; Credit availability: Decreasing

C

Consumer confidence: Rising; Direct taxation: Rising; Credit availability: Increasing

D

Consumer confidence: Falling; Direct taxation: Falling; Credit availability: Decreasing

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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