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Subjects · Leaving Cert Economics

Leaving Cert Economics: Banking & the Central Bank

How often Banking & the Central Bank comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 3 of the last 5 Higher Level papers, most recently in 2025. most years

OL Asked on 3 of the last 5 Ordinary Level papers, most recently in 2024. most years

Banking & the Central Bank, Higher Level(8 marks)

Quick ones on Banking & the Central Bank.

(a)Which is a role of the Central Bank of Ireland?
  1. Setting euro area interest rates
  2. Regulating and supervising banks
  3. Collecting income tax
(b)A bank keeps a 10% reserve ratio. How much total deposits can a new €1,000 deposit support?
  1. €900
  2. €1,100
  3. €10,000
(c)Why does the Central Bank limit mortgages to a multiple of the borrower's income?
  1. To prevent risky lending and house price bubbles
  2. To push house prices higher for existing owners
  3. To set the ECB's main interest rate for Ireland
Show the answers

(a) Regulating and supervising banks

(b) €10,000

(c) To prevent risky lending and house price bubbles

Your turn: Higher Level questions on Banking & the Central Bank.

Higher Level

Asked on 3 of the last 5 Higher Level papers, most recently in 2025. most years

Every paper, year by year

YearWhere it came up
2025Q15
2024Q14
2023Not asked
2022Not asked
2021Q5

Links open the State Examinations Commission’s paper for that year.

More Banking & the Central Bank questions

Banking & the Central Bank, 3 marks

Which would most likely increase the demand for credit?

  1. A sharp rise in interest rates on loans
  2. Falling expected incomes for households
  3. Rising consumer and business confidence
Show the answer

Rising consumer and business confidence

When people and firms feel secure about the future, they borrow to buy homes, cars and equipment. Higher rates and weaker prospects reduce borrowing.

Banking & the Central Bank, 3 marks

Why is access to cash a concern as bank branches and ATMs close?

  1. Card payments are banned in shops
  2. Older and rural people rely more on cash
  3. Cash is no longer legal tender
Show the answer

Older and rural people rely more on cash

Some people find digital payments hard to use or lack access to them. Losing easy access to cash can leave them shut out of everyday transactions.

Ordinary Level

Asked on 3 of the last 5 Ordinary Level papers, most recently in 2024. most years

Every paper, year by year

YearWhere it came up
2025Not asked
2024Q16
2023Q2
2022Not asked
2021Q13

Links open the State Examinations Commission’s paper for that year.

More Banking & the Central Bank questions

Banking & the Central Bank, 2 marks

Which is a function of the Central Bank of Ireland?

  1. Setting euro area interest rates
  2. Collecting income tax
  3. Regulating banks and financial firms
Show the answer

Regulating banks and financial firms

The Central Bank supervises banks, insurers and credit unions, protects consumers and sets mortgage lending rules. The ECB sets rates and Revenue collects taxes.

Banking & the Central Bank, 3 marks

The Central Bank's mortgage rules limit?

  1. The interest rate paid on people's savings
  2. How much people can borrow compared with income
  3. The price that builders charge for new houses
Show the answer

How much people can borrow compared with income

The rules cap loan-to-income and loan-to-value ratios. They stop households taking on too much debt and help prevent another property bubble.

Banking & the Central Bank, 3 marks

Commercial banks create credit by?

  1. Lending out part of the deposits they receive
  2. Printing new banknotes for their customers
  3. Collecting taxes on behalf of the State
Show the answer

Lending out part of the deposits they receive

Banks keep a fraction of deposits as reserves and lend the rest. Loans are spent and deposited again, allowing more loans, so the money supply grows.

Other Economics topics

All of Leaving Cert Economics