0455.4.4.2 — monetary policy measures Changes in interest rates, money supply and foreign exchange rates.: past paper questions
Real questions on 0455.4.4.2 — monetary policy measures changes in interest rates, money supply and foreign exchange rates.
The newest 7 of 7 written questions. Open one to see it on the real paper.
- 0455/22 · February/March 2026 · Q3d[8]
Discuss whether or not having a fixed exchange rate will benefit an economy.
See it on the paper → - 0455/11 · May/June 2024 · Q23[1]
What is most likely to increase when the rate of inflation gradually changes from 2% to 8% in one year?
See it on the paper → - 0455/21 · October/November 2022 · Q3c[6]
Analyse how a cut in interest rates might create conflicts between macroeconomic aims.
See it on the paper → - 0455/22 · February/March 2021 · Q4c[6]
Analyse how a central bank could reduce inflation.
See it on the paper → - 0455/21 · October/November 2020 · Q1b[2]
two factors that affect borrowing in an economy.
See it on the paper → - 0455/22 · May/June 2020 · Q3d[8]
whether or not a central bank should raise the rate of interest.
See it on the paper → - 0455/12 · May/June 2019 · Q9[1]
In recent years some central banks have reduced interest rates below 1% per year. What is the purpose of this monetary policy?
See it on the paper →
What examiners said
Comprehensive responses • A few candidates discussed the benefits of maintaining a fixed exchange rate, including certainty for firms, effects on investment decisions, and constraints on other macroeconomic objectives. • A few candidates successfully contrasted fixed and floating exchange rates, explaining how floating rates could help manage balance-of-payments difficulties. • A few candidates sh...
— Examiner report, February/March 2026, 0455/22 Q3(d) (Cambridge)
Good answers started with the basic macroeconomic aims (economic growth, low inflation, full employment, and balance of payments) and examined how conflicts could arise. The most popular approach was to explain how interest rate cuts would boost borrowing and thus consumption and total demand in the economy, whilst at the same time reducing saving. This in turn, however, could fuel demand-pull inf...
— Examiner report, October/November 2022, 0455/21 Q3(c) (Cambridge)
There were some strong answers to this question. Some of these were relatively brief but they provided clear and relevant links between, most frequently, an increase in the rate of interest and a cut in the money supply on increases in the price level. For example: The central bank could adopt a contractionary monetary policy which involves increasing interest rates and cutting the money supply....
— Examiner report, February/March 2021, 0455/22 Q4(c) (Cambridge)
Past papers, syllabus and examiner reports © UCLES (Cambridge University Press & Assessment). Questions are matched to topics from the official syllabus. AssessPro is independent and not endorsed by Cambridge.