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2 questions on Commercial Banks and Investment Banks (AQA specification 2.4.2) from the A-Level Economics papers, 2021–2023. Every question links to the official mark scheme at the page its answer begins on.
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Extract E (lines 4–5) states: ‘…banks in the UK decreased lending, reducing the availability of credit for households and firms. This damaged the real economy and created high unemployment.’ With the help of a diagram, explain how reduced availability of credit from banks may lead to increased unemployment.
Explain the role of commercial banks in the economy.
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