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

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Question 51

All other things being equal, if the velocity of circulation ( $V$ ) and the level of real output ( $Q$ ) are assumed to be constant, the classical quantity theory of money ( $M V = P Q$ ) predicts that an $x\%\,$ increase in the money supply ( $M$ ) will always cause an $x%x\%$

A

increase in the general price level.

B

decrease in the rate of interest.

C

increase in the velocity of circulation.

D

increase in real national output.

Markscheme

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

A Level
Economics
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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