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2.3 How the government manages the economy

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Question 10

The central bank of Norland has an inflation target of 2%. It is considering raising interest rates.

Indicator20242025
Inflation rate2.1%6.0%
Unemployment rate5.0%7.5%

Explain why raising interest rates could create a conflict between the central bank's inflation and employment objectives in Norland.

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Markscheme

2.3 How the government manages the economy Questions

  1. GCSE
  2. /Economics
  3. /2.3 How the government manages the economy

104 exam-style questions on AQA GCSE Economics 2.3 How the government manages the economy, covering 2.3.1a Fiscal policy and income and expenditure, 2.3.1b Fiscal policy and government objectives, 2.3.1c The government budget, 2.3.2a The meaning of monetary policy, 2.3.2b Uses of monetary policy, 2.3.3a Supply-side policies and their trade-offs, 2.3.3b Using supply-side policies, and 2.3.4 Policies to correct positive and negative externalities. Each one has a worked solution and a mark scheme showing where the marks go.

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