A-LevelEconomicsGovernment macroeconomic intervention9708/31 · May/June 2018 · Q231 Mark

According to JM Keynes, sometimes monetary policy is ineffective. The supply of money (MS) is assumed to be controlled by the central bank. The demand for money is LP and there has been an increase in real income in the economy. In the diagram which position makes monetary policy ineffective? [Figure 23.1] A A B B C C D D

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Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

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Topic: Government macroeconomic intervention, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, May/June 2018 Paper 3 Variant 1, question 23.

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