wo Flashcards
Quantitative easing
is when we buy bonds to lower the interest rates on savings and loans.
contractionary monetary policy
driven by increases in the various base interest rates controlled by modern central banks or other means producing growth in the money supply.
the goal is to reduce inflation by limiting the amount of active money circulating in the economy.
price level
the average of current prices across the entire spectrum of goods and services produced in an economy
when changing the base rate, the MPC consider
expected inflation rate
confidence
growth rate
housing
likely effect of quatitative easing
increase in the rate of inflation
define interest
the cost of borrowing, the reward for saving
what policies could reduce unemployment
A decrease in direct taxes on company profits Education and training. ... Reduce the power of trades unions. ... Employment subsidies. ... Improve labour market flexibility. ... Stricter benefit requirements. ... Improved geographical mobility. ... Maximum working week.
define price level
avg current prices across all the goods and services being produced by an economy
three likely effects of reduction of variable costs
Both AC and MC will fall
There will be a new profit maximisation point where MR
= new MC
Profit maximising output will be higher
one strategy to achieve supernormal profits in the long run
branding or loyalty cards
