'The failure of the policy of quantitative easing (QE) to solve problems associated with an economic recession illustrates the weakness of monetary transmissions mechanisms in particular and monetary policy in general.' Critically evaluate this statement.

Mark scheme

Marking points from the official mark scheme (May/June 2019). The mark or mark type is shown in brackets.

1. Quantitative Easing should be explained and the problems generally associated with an economic recession should be clearly identified. The links between Quantitative Easing and the monetary transmissions mechanism should be established and these links should be further extended to allow a discussion of the effectiveness of monetary policy on real variables such as income, output and employment. Evaluative comment and a conclusion should be provided to assess the accuracy of the statement.