Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

The diagram illustrates the long-run aggregate supply (LRAS) and aggregate demand (AD) curves for an economy. The starting equilibrium is at point X. Which pair of monetary policies will move the equilibrium to point Y?

  • Amoney supply increase; rate of interest increase
  • Bmoney supply decrease; rate of interest increase
  • Cmoney supply increase; rate of interest decrease
  • Dmoney supply decrease; rate of interest decrease

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI