Friday, January 09, 2009

Unit 2: Monetary policy: Alternatives to changing interest rates

A very topical post from the Economics Teacher blog explaining that monetary policy is potentially much more than merely changing interest rates

The BBC has this clip on UK interest rates as they hit an all time low

a) Why might traditional monetary policy be losing its effectiveness in influencing aggregate demand?
b) How can quantitative easing help monetary policy become more effective?
c) What policies does the BBC clip suggest the UK gov has used to try and stimulate aggregate demand in the UK?

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