The Central Bank raises the base interest rate to curb inflationary pressures. Which one of the following combinations is most likely to reduce the effectiveness of this contractionary monetary policy?
| Consumer confidence | Direct taxation | Credit availability | |
|---|---|---|---|
| A | Falling | Rising | Decreasing |
| B | Rising | Falling | Increasing |
| C | Falling | Falling | Increasing |
| D | Rising | Rising | Decreasing |
Consumer confidence: Falling; Direct taxation: Rising; Credit availability: Decreasing
Consumer confidence: Rising; Direct taxation: Falling; Credit availability: Increasing
Consumer confidence: Falling; Direct taxation: Falling; Credit availability: Increasing
Consumer confidence: Rising; Direct taxation: Rising; Credit availability: Decreasing
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.