Economics GCSE
Monetary Policy
What Monetary Policy means in Economics GCSE, as defined for Pearson Edexcel.
Definitions of Monetary Policy
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
The use of interest rates and the money supply to influence the level of aggregate demand and inflation.
The use of interest rates and money supply (QE) by the central bank to influence aggregate demand.
Topics that use Monetary Policy
- Macroeconomic objectives (Pearson Edexcel GCSE)
- Relationships between objectives and policies (Pearson Edexcel GCSE)
Related terms
- Fiscal Policy
- Phillips Curve
- Current Account Deficit
- Gross Domestic Product (GDP)
- Inflation
- Macroeconomic Objectives
- Supply-Side Policies
- Time Lags
Using Monetary Policy in the exam
Definition questions usually carry one or two marks, and examiners look for the precise wording. Write the definition from memory, check it against the version above, and then use the term in a longer answer on the same topic so it sticks.
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