Monetary policy

Explain one reason why a country might operate a managed exchange rate. Refer to Extract D in your answer.

With reference to the second paragraph of Extract E, examine two likely problems for the expansion of the chocolate industry in Ghana.

Discuss factors influencing the level of aggregate demand in Ghana. Use an aggregate demand and aggregate supply diagram in your answer.

EITHER

Evaluate the microeconomic and macroeconomic effects of high interest rates in Ghana, or another developing country of your choice.

Evaluate the microeconomic and macroeconomic effects of Ghana joining the African Continental Free Trade Agreement (Extract F).

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In September 2022 the Bank of England increased the base interest rate from 1.75% to 2.25%.

(Source: adapted from https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp)

Draw an aggregate demand and aggregate supply diagram to illustrate the likely impact of an increase in the UK base interest rate on the average price level and real output.

Which one of the following is the most likely impact of an increase in the base interest rate?

A decrease in the:

Explain what is meant by the Lewis model. Refer to Extract D in your answer.

Examine two demographic factors influencing development in Kenya.

Using the example of cut flowers (Extract F), discuss how the concept of absolute advantage may lead to growth in Kenya. Use numerical or diagrammatic analysis in your answer.

EITHER

Evaluate the microeconomic and macroeconomic effects of decreasing interest rates in Kenya, or another developing country of your choice.

Evaluate the microeconomic and macroeconomic strategies that could be used to promote development in Kenya, or another developing country of your choice.

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The European Central Bank introduced a new round of quantitative easing (QE) in March 2020, purchasing up to €750 billion of assets. The objective of this QE was to reduce the serious risks to the effectiveness of monetary policy resulting from a significant recession. The European Central Bank’s target for inflation remains at ‘below but close to 2%’.

(Source adapted from: https://www.ecb.europa.eu/press/pr/date/2020/html/ecb. pr200318_1~3949d6f266.en.html)

Evaluate the effectiveness of quantitative easing during ‘a significant recession’.

Explain how the Turkish central bank intervenes in the currency market to prevent ‘excessive appreciation or depreciation of the Turkish lira’ (Extract A, lines 7–8).

Examine two reasons why the Turkish government may want to avoid a significant fall in the exchange rate of the Turkish lira.

Discuss the likely success of policies to reduce the consumption of single‑use plastic bags in cities such as Istanbul.

EITHER

Evaluate the likely microeconomic and macroeconomic effects of a rise in interest rates in Turkey.

Evaluate the microeconomic and macroeconomic impact of large infrastructure projects such as the building of a third airport in Istanbul.

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Explain how the Turkish central bank intervenes in the currency market to prevent ‘excessive appreciation or depreciation of the Turkish lira’ (Extract A, lines 7–8).

Examine two reasons why the Turkish government may want to avoid a significant fall in the exchange rate of the Turkish lira.

Discuss the likely success of policies to reduce the consumption of single‑use plastic bags in cities such as Istanbul.

EITHER

Evaluate the likely microeconomic and macroeconomic effects of a rise in interest rates in Turkey.

Evaluate the microeconomic and macroeconomic impact of large infrastructure projects such as the building of a third airport in Istanbul.

Write your answer here:

With reference to Figure 1, calculate the percentage change in the value of the euro in pounds from the start of 2009 to the start of 2015.

With reference to the information provided and your own knowledge, examine two factors which might explain the change in the rate of Eurozone inflation as shown in Figure 2.

Since mid-2015 the euro has appreciated. Assess the likely impact of an appreciation of the euro on the current account of the balance of payments for Eurozone countries.

Discuss the likely success of the ECB’s quantitative easing programme in moving Eurozone inflation closer to ‘the central bank’s ceiling of 2%’ (Extract A, line 17).

Discuss ‘looser fiscal policy’ and ‘supply-side reforms’ (Extract A, lines 20 and 21) that may be used by governments of Eurozone countries to increase economic growth.