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Subjects · Leaving Cert Economics

Leaving Cert Economics: Monetary policy & the ECB

How often Monetary policy & the ECB comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 4 of the last 5 Higher Level papers, most recently in 2024. most years

OL Asked on 4 of the last 5 Ordinary Level papers, most recently in 2025. most years

Monetary policy & the ECB, Higher Level(6 marks)

Quick ones on Monetary policy & the ECB.

(a)Which body sets interest rates for euro area countries, including Ireland?
  1. Central Bank of Ireland
  2. European Central Bank (ECB)
  3. Department of Finance
(b)What is the ECB's primary objective?
  1. Balanced regional development
  2. Full employment
  3. Price stability
(c)To bring down high inflation, the ECB is most likely to…
  1. Raise interest rates
  2. Raise VAT rates
  3. Cut interest rates
Show the answers

(a) European Central Bank (ECB)

(b) Price stability

(c) Raise interest rates

Your turn: Higher Level questions on Monetary policy & the ECB.

Higher Level

Asked on 4 of the last 5 Higher Level papers, most recently in 2024. most years

Every paper, year by year

YearWhere it came up
2025Not asked
2024Q14
2023Q8
2022Q7
2021Q10

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

Ordinary Level

Asked on 4 of the last 5 Ordinary Level papers, most recently in 2025. most years

Every paper, year by year

YearWhere it came up
2025Q12
2024Q13
2023Q13
2022Not asked
2021Q13

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

More Monetary policy & the ECB questions

Monetary policy & the ECB, 2 marks

Who sets the interest rates for euro area countries like Ireland?

  1. The Central Bank of Ireland
  2. The Department of Finance
  3. The European Central Bank (ECB)
Show the answer

The European Central Bank (ECB)

The ECB in Frankfurt sets interest rates for the whole euro area. The Central Bank of Ireland is part of the Eurosystem but does not set rates on its own.

Monetary policy & the ECB, 2 marks

The main aim of the ECB's monetary policy is?

  1. A balanced Irish budget
  2. Price stability
  3. Full employment in Ireland
Show the answer

Price stability

The ECB's main job is to keep inflation in the euro area low and stable. It aims for inflation of 2% over the medium term.

Monetary policy & the ECB, 3 marks

To bring down high inflation, the ECB is most likely to?

  1. Raise interest rates
  2. Cut interest rates
  3. Cut income tax
Show the answer

Raise interest rates

Higher interest rates make borrowing dearer and saving more attractive. Spending falls, demand cools and inflation eases. Income tax is set by governments, not the ECB.

Other Economics topics

All of Leaving Cert Economics