Monetary Policy Part 2

How monetary policy can effect the economy

Category:

Education

Tags:

• Economics
• AS Economics
• A Level Economics
• Macroeconomics
• interest rates
• monetary policy
• AD and AS model

[BrynJonesOnline]

Not a dumb question at all! The MPC is given the task of achieving CPI inflation of 2%. They are allowed flexibility of + or - 1%; ie they need to keep CPI inflation between 1% and 3%. If they achieve that, then they can look at setting interest rates to achieve long term growth. But, in reality it appears that they do take the rate of growth/unemployment in to account, otherwise with UK CPI inflation at 4%, they would have raised interest rates by now!

[BrynJonesOnline]

No, I 'm an A level teacher at a 6th form College in the UK

[hemant1993]

Do my exam for me 2moro plzzzzzzzzzzzzzzzzzzzzzzzzzzzz :'(

[cyborganic99]

i get it. very clearly explained

[theairborne145]

sorry if this is a dumb question, but are the MPC more concerned with achieving economic growth and higher levels of employment, or a lower price level and less inflation which results in more unemployment? because if the AS curve is unable to move with the AD curve, aren't these two objectives directly conflicting?

[dongjinmoon]

u make it sooooo easy to understand!

may i ask if you're a professor in a certain university?

[likewhoami]

THANK YOU :)

[bobichina]

Your lecture style is soooooo good !!!