CIPS Exam L3M1 Topic 2 Question 32 Discussion

Actual exam question for CIPS's L3M1 exam

Question #: 32
Topic #: 2

[All L3M1 Questions]

Monetary policy deals with:

AGovernment decisions and actions regarding exchange rates and unemployment in the economy

BGovernment decisions and actions regarding the size of banknotes and coins in the economy

CGovernment decisions and actions regarding the level of interest rates and supply of money in the economy

DGovernment decisions and actions regarding the balance between taxation revenue and public expenditure

Show Suggested Answer

Suggested Answer: C

Government decisions and actions regarding the level of interest rates and supply of money in the economy.

Fiscal policy relates to taxation and its relationship to government expenditure.

The other two suggested answers: exchange rates and unemployment rates are a factor of other poli-cies; the size of coins and banknotes is beyond the scope of your syllabus and my knowledge. :)

by Sheridan at Mar 19, 2025, 11:22 PM

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15 days ago

I think the correct answer is C. Monetary policy deals with government decisions and actions regarding the level of interest rates and supply of money in the economy.

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Pamella

10 hours ago

So, the government uses monetary policy to influence the economy.

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Brock

4 days ago

That's correct, it's important for controlling inflation and economic growth.

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Ellsworth

5 days ago

I agree, monetary policy is all about interest rates and money supply.

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