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A-LevelEconomicsGovernment macroeconomic intervention9708/31 · Oct/Nov 2019 · Q291 Mark

When would a central bank be able to exert the closest control over the money supply of the country? A If it intervened in the foreign exchange market to influence the value of domestic currency. B If it only issued domestic currency at a fixed price in exchange for US$. C If the country was part of a monetary union with other countries. D If the domestic currency was allowed to float freely in the foreign exchange market.

Mark scheme

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

  1. [1] Correct option: D

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About this question

Topic
Government macroeconomic intervention, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source
A-Level Economics, Oct/Nov 2019 Paper 3 Variant 1, question 29.

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