- 20 Marks
MFS – OCT 2022 – L2 – Q6 – Control of Money Supply and Interest Rates
Explain why authorities cannot control both money supply growth and interest rates, using a diagram
Question
The fact that the monetary authorities are unable to control both the growth of money supply and interest rates in a free market economy is widely acknowledged in monetary and financial circles. How would you explain this assertion? Use the appropriate diagram in your analysis.
(20 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Diagram, Free Market Economy, Interest rates, Monetary Authorities, Money Supply
- Level: Level 2
- Topic: The money supply
- Series: OCT 2022
Report an error
