6 marksMonetary Theory and Policy
CAPE Economics Unit 2 · 2014 · Paper 2 · Question 3(b)
Outline THREE reasons for holding money or THREE types of demand for money.
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Practise this questionOther parts of this question
- 3(a)(i)Define the concept 'Velocity of money'.[2 marks]
- 3(a)(ii)Define the concept 'Currency substitution'.[2 marks]
- 3(a)(iii)Define the concept 'Monetary transmission mechanism'.[2 marks]
- 3(c)Assess how the Central Bank can use monetary policy to positively impact aggregate demand.[5 marks]
- 3(d)Discuss TWO reasons why the Central Bank's policy options to combat inflation may achieve only limited success.[8 marks]
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