Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

A central bank carries out quantitative easing by buying government securities. What is likely to occur to interest rates and aggregate expenditure?

  • Ainterest rates: fall; aggregate expenditure: fall
  • Binterest rates: fall; aggregate expenditure: rise
  • Cinterest rates: rise; aggregate expenditure: fall
  • Dinterest rates: rise; aggregate expenditure: rise

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