The money supply in Bangladesh rose each year from 2010 to 2018. Shifts in the money supply and the foreign exchange rate can influence a government’s macroeconomic policy aims, including full employment. There have been few mergers among commercial banks in Bangladesh, even though its banks are larger than many of its other firms.
(a)[2]
Identify any two functions that money performs.
(b)[4]
Explain two reasons why commercial banks may wish to merge.
(c)[6]
Analyse how a decline in a country’s foreign exchange rate could raise employment.
(d)[8]
Discuss whether or not it is advantageous to keep a firm small.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A medium of exchange” …