👑Monetary and Fiscal Policies  Essays

In many economies, the use of cash is declining as people use contactless payments that transfer funds directly between bank deposits.

Explain what represents money in a modern economy and how the use
of contactless payments without the use of cash will affect the functions
of money.

Discuss whether a government should use monetary policy or fiscal policy to solve the problem of deflation in an economy

(12 marks)

Analyse how an increase in bank lending can benefit an economy.

Explain functions of a central bank.

In February 2016, share prices on stock exchanges fell throughout the world. There were a number of reasons for this; including concerns about the slowdown in world growth, the possibility of deflation and unemployment, and fears that some commercial banks could go out of business

Discuss whether or not government policy measures to reduce unemployment will cause inflation.

Analyse how fiscal policy and monetary policy could be used to solve the problem of deflation. Assess which policy is likely to be more effective. [12]

Explain the difference between fiscal policy and monetary policy. Show how each can be used to increase aggregate demand. [8]

Discuss the policy options available to a government faced with inflation, and consider which is most likely to be effective. [12]

Explain what is used as money in a modern economy and how an increase in the quantity of money can cause prices to rise. (8)

Analyse how a central bank could reduce inflation.

Explain two reasons why a central bank may want to reduce borrowing.

Discuss whether or not a central bank should limit the amount commercial banks can lend to its customers.