monetary policy Flashcards
1
Q
time lag
A
the back of england estimates a change in the bank rates will affect output within a year but the full impact of inflation takes 2 years
2
Q
how can quantitative easing
A
- give money to citizens ( helicopter money)
- asset purchase scheme
3
Q
factors affecting base rate decisions
A
- labour markets ( wage rate - unemployment )
- assets prices
- trends in FX markets
-international data
- consumer confidence
- business confidence
- inflation figures
- GDP growth and spare capacity
4
Q
how can central banks influence the growth of the money supply
A
- quantitative easing
- open market operations
- set reserve requirements
- volume of cash produced
- change in bank rates
