Monetary Policy Flashcards
1
Q
What is monetary policy about?
A
Controlling money
2
Q
What does it involve
A
Interest rates, money supply and exchange rates
3
Q
Does it affect aggregate supply or aggregate demand?
A
Aggregate demand- its demand side policy
4
Q
What does changes to interest rates affect?
A
Borrowing, saving, spending and investment
5
Q
What can high interest rates do?
A
Restrict the money supply as there’ll be less demand for loan
