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3.6 Monetary policy

3.6 Monetary policy

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Question 9

Inflation is above target while unemployment is also high. Why does this make an interest-rate decision difficult?

[1]
A

Higher rates always increase both inflation and employment

B

Lower rates reduce borrowing and consumer spending

C

A rate rise may reduce inflation but weaken growth and employment further

D

Monetary policy cannot affect price stability

Markscheme

3.6 Monetary policy Questions

  1. GCSE
  2. /Economics
  3. /3.6 Monetary policy

29 exam-style questions on OCR GCSE Economics 3.6 Monetary policy, covering 3.6.1 What is monetary policy, 3.6.2 Monetary policy and macro objectives, and 3.6.3 Effects of monetary policy. Each one has a worked solution and a mark scheme showing where the marks go.

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