Economics 0455 · IGCSE · Current account of balance of payments
Current account of balance of payments — practice question
The Monetary Authority of Singapore (MAS), the state institution that oversees the country's monetary policy, has permitted the Singapore dollar to appreciate. Yet the elevated value of the Singapore dollar has meant that firms need fresh incentives, including tax cuts and subsidies.
(a)[2]
Define what is meant by monetary policy.
(b)[4]
Explain two functions performed by money.
(c)[6]
Analyse the effects of an appreciating currency on a country's current account in the balance of payments.
(d)[8]
Discuss whether a tax reduction is beneficial for an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Policy used to control the supply of money” …