IB Economics HL 3.5.5 Expansionary and Contractionary Monetary Policy Topic Practice

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Study 3.5.5—Expansionary and contractionary monetary policy conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

Question 1

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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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