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CAIE IGCSE Economics 4.3.1 Definitions of money supply and monetary policy

Keep the two definitions distinct by stating the stock of money available and then linking central-bank monetary instruments to aggregate demand, inflation or another…

Syllabus
2027–2029
Course
Economics 0455

Exam points

  • Define money supply as the total quantity of money available within the economy.
  • Define monetary policy through money supply, interest or exchange rates used to influence demand.

4.3.1—Definitions of money supply and monetary policy question 1

[Maximum number: 2]

More government spending creates opportunity costs. This was one of the problems that the president of France faced in 2017. Since he came to power, he has focused on using supply-side policy measures, rather than monetary policy. Trade union membership has reduced in France in recent years.

Define monetary policy.

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