A-LevelEconomicsGovernment Macroeconomic PoliciesOct/Nov 2020Paper 1 Q191 Mark
Under which combination of circumstances will a policy of increasing the money supply be most effective at moving an economy out of recession?
Acircumstance one: depreciating exchange rate, circumstance two: global financial crisis
Bcircumstance one: high nominal interest rates, circumstance two: appreciating exchange rate
Ccircumstance one: low aggregate demand, circumstance two: inflation rate above the target level
Dcircumstance one: low nominal interest rates, circumstance two: no spare capacity available
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of government macroeconomic policies within the Economicssyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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