Sunday, August 24, 2008

Unit 2 Monetary policy: The difficulty in setting interest rates when faced with conflicting macro economic objectives

The BBC reports the latest thoughts of the MPC on interest rates

http://news.bbc.co.uk/1/hi/business/7571925.stm

a) What problem means that interest rates should rise and how would that solve the problem?
b) What problem means that interest rates should fall and how would that solve the problem?

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