In 2023, the interest rate set by the central bank in Argentina reached 97%. This was to stop the foreign exchange rate of the Argentinian currency from falling further. Commercial banks in Argentina became concerned over their levels of loans and household savings.

4(a)Household Spending Saving BorrowingEasy2 marks

Identify two influences on saving.

Two answers required.

4(b)Money BanksMedium4 marks

Explain the difference between a central bank and a commercial bank.

Answer

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4(c)Monetary PolicyHard6 marks

Analyse how higher interest rates can affect firms.

Answer

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4(d)Exchange Rates International CompetitivenessHard8 marks

Discuss whether or not a fall in the foreign exchange rate of a currency is an advantage for an economy.

Answer

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