CAIE A-Level Economics 5.3.3 Monetary Policy Stance

Practise recognising expansionary or contractionary monetary policy from interest rates, money supply and credit controls and choosing a stance for inflation, deflation or…

Exam points

classify lower rates, more money or relaxed credit as expansionary monetary policy
classify higher rates, less money or tighter credit as contractionary monetary policy
select contraction for above-target inflation and expansion for deflation or demand-deficient output

[Maximum number: 1]

An increase in interest rates is an example of which type of policy?

contractionary fiscal policy

contractionary monetary policy

expansionary monetary policy

restrictive supply-side policy

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5.3.3—Monetary policy stance question 1