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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Bulah

27 days ago

I believe it's about the size of banknotes and coins, so option B.

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Tesha

1 months ago

I'm not sure, but I think it's about exchange rates and unemployment.

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Sharee

1 months ago

Haha, option B? Seriously? That's like saying monetary policy is about the size of the coins in your pocket.

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Tamra

19 hours ago

D) Government decisions and actions regarding the balance between taxation revenue and public expenditure

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Fanny

3 days ago

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

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Isreal

6 days ago

A) Government decisions and actions regarding exchange rates and unemployment in the economy

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Franchesca

1 months ago

I agree with Devorah, option C seems to be the correct answer.

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Devorah

1 months ago

I think monetary policy deals with government decisions on interest rates and money supply.

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Alberto

1 months ago

I'm going with C as well. Governments use monetary policy to influence economic conditions through interest rates and money supply.

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Heike

1 months ago

Definitely C. Monetary policy is all about controlling the money supply and interest rates, not exchange rates or banknotes.

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Teri

6 days ago

That's right, monetary policy plays a crucial role in influencing economic growth and stability.

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Gregoria

11 days ago

Yes, it's important for the government to make decisions on interest rates and money supply to regulate the economy.

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France

26 days ago

I agree, monetary policy is mainly about controlling interest rates and the money supply.

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Ludivina

2 months 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

1 months ago

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

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Brock

1 months ago

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

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Ellsworth

1 months ago

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

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