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2.3 How the government manages the economy

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Question 57

A central bank makes the following changes.

ChangeBeforeAfter
The central bank's key rate, used by commercial banks as a benchmark4.5%3.5%
The total amount of money circulating in the economy£2,900 billion£3,000 billion

Explain why both changes are examples of monetary policy. In your answer, explain how the first change could support economic growth and employment.

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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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