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

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Question 54

The table below shows four possible combinations of macroeconomic indicators facing an economy. All other things being equal, which one of the following combinations is most likely to lead the central bank to raise its policy interest rate?

Output GapExchange RateInflation Rate
ANegativeRisingBelow target
BPositiveFallingAbove target
CNegativeFallingAbove target
DPositiveRisingBelow target
A

Combination A

B

Combination B

C

Combination C

D

Combination D

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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