Money and banking (3)

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1.

Question 3

The Bank of England has employed quantitative easing on multiple occasions. Using a diagram, explain how quantitative easing is intended to affect the money supply and interest rates. Discuss the potential limitations of this policy.

2.

(a) Explain the difference between a demand deposit account and a savings account. (6 marks)

3.

Question 1

The demand for overdraft facilities has been increasing in recent years. Explain, using economic theory, the factors that might lead to this increase in demand. Assess the potential benefits and drawbacks of banks providing overdraft facilities to consumers.