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3 marksMonetary Theory and Policy

CAPE Economics Unit 2 · 2021 · Paper 2 · Question 2(b)(i)

Explain the given statements.

Explain the statement: 'Cigarettes are not generally considered as money.'

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Other parts of this question

  1. 2(a)List FOUR instruments of monetary policy.[4 marks]
  2. 2(b)(ii)Explain the statement: 'John has just graduated and is looking for a job. However, John's situation is not considered a case of cyclical unemployment.'[3 marks]
  3. 2(b)(iii)In Country M, the consumer price index (CPI) in 2017 was 110 and in 2018 it was 120. Determine the rate of inflation across the two years.[3 marks]
  4. 2(c)With the aid of a diagram representing the market for loanable funds, discuss 'crowding out'.[12 marks]

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