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

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Question 24

Extract C (lines 14–16) states: 'The central bank opted to cut its benchmark interest rate to support economic growth and steer the economy away from a potential recession.'

Explain how a reduction in interest rates by a central bank might help to prevent a recession. You may use an AD/AS diagram to support your explanation.

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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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