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12 marksMonetary Theory and Policy

CAPE Economics Unit 2 · 2013 · Paper 2 · Question 3(b)

Discuss THREE tools of monetary policy that any Central Bank in the Caribbean region can use to help control inflation.

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Other parts of this question

  1. 3(a)(i)Define the term 'money'.[1 mark]
  2. 3(a)(ii)Briefly describe TWO types of money.[2 marks]
  3. 3(a)(iii)Distinguish between M1 and M2.[2 marks]
  4. 3(c)Use the Keynesian liquidity preference framework to illustrate how the contractionary policies discussed in 3 (b) will impact interest rates and the demand for…[8 marks]

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