CAIE IGCSE Economics 4.3 Monetary Policy Topic Practice

Question 1

[Maximum number: 1]

What is the money supply?

A

the total quantity of foreign currency available within the economy

B

the total quantity of money available within the economy

C

the total quantity of money issued by the central bank

D

the total quantity of money within commercial banks

Question 2

[Maximum number: 1]

What is the most likely result of a fall in interest rates?

A

a fall in inflation

B

a fall in investment

C

a rise in consumer spending

D

a rise in saving

Question 3

[Maximum number: 1]

Which combination of policy measures is most likely to increase total demand in an economy?

money supply

interest rate

exchange rate

decrease

decrease

revaluation

decrease

increase

devaluation

increase

decrease

devaluation

increase

increase

revaluation

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