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IB Economics HL 3.5.5 Expansionary and contractionary monetary policy Question Bank

Practise IB Economics SL/HL 3.5.5 by applying expansionary and contractionary monetary policy concepts to exam-style questions.

Syllabus
First assessment 2022
Course
Economics HL
Level
HL

Exam points

  • identify the relevant model, concept or evidence
  • apply the correct subject framework to the question
  • evaluate the result using clear evidence and subject terminology

3.5.5—Expansionary and contractionary monetary policy question 1

[Maximum number: 1]

The data in Table 2 refer to Kanyaland, a small, open, developing economy in 2019. All data are in billions of Kanyaland dollars (K$).

Table 2

Table 2

With reference to the CPI data in Table 3, describe the most likely monetary policy response adopted at the end of 2018 by the central bank of Kanyaland.

Table 4 shows the income tax rates in Kanyaland.

Table 4

Table 4

Rufus and Sammy are citizens of Kanyaland. Rufus earns K$23000\mathrm{K}\$23000 annually whereas Sammy earns K$46000 annually.

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