Monetary policy: past paper questions
Real questions on monetary policy
The newest 16 of 16 written questions. Open one to see it on the real paper.
- 2281/22 · May/June 2026 · Q3d[8]
Discuss whether or not a reduction in bank lending will harm an economy.
See it on the paper → - 2281/22 · October/November 2024 · Q1h[6]
Discuss whether or not the Jordanian central bank should have raised the rate of interest in 2021. Section B Answer any three questions. Each question is introduced by stimulus material. In your answers you may refer to the material and/or other examples you have studied.
See it on the paper → - 2281/23 · October/November 2024 · Q5d[8]
Discuss whether or not a cut in the interest rate will reduce inflation.
See it on the paper → - 2281/23 · October/November 2023 · Q3b[4]
Explain two functions of a central bank.
See it on the paper → - 2281/21 · May/June 2023 · Q4d[8]
Discuss whether or not a rise in a country’s foreign exchange rate would benefit its economy.
See it on the paper → - 2281/22 · October/November 2022 · Q5d[8]
Discuss whether or not a decrease in the rate of interest will increase a country’s GDP.
See it on the paper → - 2281/23 · October/November 2022 · Q5d[8]
Discuss whether or not an increase in commercial bank lending will increase economic growth.
See it on the paper → - 2281/21 · May/June 2021 · Q5c[6]
Analyse how a central bank could avoid deflation.
See it on the paper → - 2281/22 · May/June 2021 · Q4c[6]
Analyse how a rise in the interest rate could cause a recession.
See it on the paper → - 2281/22 · May/June 2021 · Q5c[6]
Analyse how a fall in a country’s foreign exchange rate could increase employment.
See it on the paper → - 2281/22 · October/November 2020 · Q5d[8]
Discuss whether or not a country should switch from a fixed foreign exchange rate system to a floating foreign exchange rate system.
See it on the paper → - 2281/22 · May/June 2020 · Q3d[8]
Discuss whether or not a central bank should raise the rate of interest.
See it on the paper → - 2281/23 · October/November 2019 · Q1d[4]
Explain, using information from the extract, why a depreciation of the kwacha harmed the Zambian economy.
See it on the paper → - 2281/23 · October/November 2019 · Q1f[5]
Discuss whether or not a central bank should reduce commercial bank lending.
See it on the paper → - 2281/21 · May/June 2019 · Q5b[4]
Explain two reasons why a central bank may want to reduce borrowing.
See it on the paper → - 2281/21 · May/June 2019 · Q5d[8]
Discuss whether or not a rise in the rate of interest will reduce economic growth.
See it on the paper →
What examiners said
The majority of candidates provided strong answers by identifying and then explaining two functions of a central bank. Most correct answers made reference to the control of inflation or the issuing of notes and coins. Weaker responses only correctly identified and explained one function or only identified functions. Common errors related to being unclear what was meant by ‘lender of last resort’,...
— Examiner report, October/November 2023, 2281/23 Q3(b) (Cambridge)
Most candidates understood what was meant by a country’s foreign exchange rate, but a sizeable minority did not. Even where they did understand, quite a few candidates gave an incorrect explanation of the impact of a rise in the foreign exchange rate. They stated that the result would be that exports would be cheaper and imports more expensive and then described the consequences of that, which did...
— Examiner report, May/June 2023, 2281/21 Q4(d) (Cambridge)
A small proportion of candidates wrote about an increase rather than a decrease in the rate of interest. Of those who did answer the actual question set, most recognised that it would be likely to reduce saving and increase borrowing and spending. The stronger answers went on to examine the possible impact on a country’s GDP. An example of a Level 4 answer: A decrease in the rate of interest red...
— Examiner report, October/November 2022, 2281/22 Q5(d) (Cambridge)
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