Bangladesh’s money supply rose each year between 2010 and 2018. Variations in the money supply and the foreign exchange rate may influence a government’s macroeconomic objectives, such as full employment. Mergers among commercial banks in Bangladesh have been uncommon, even though its banks are larger than many of its other firms.
(a)[2]
Identify any two functions performed by money.
(b)[4]
Explain two reasons why commercial banks might wish to merge.
(c)[6]
Analyse how a fall in a country’s foreign exchange rate could lead to higher employment.
(d)[8]
Discuss whether keeping a firm small is beneficial.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Medium used for exchange” …