Here is an example of using methods of monetary policy to prove economy in recession.
UK interest rates have been left at 0.5% following the Bank of England's latest meeting. The cost of borrowing has been at a record low since March 2009 and economists do not expect the central bank to raise rates in the near term. The Bank's Monetary Policy Committee (MPC) also maintained the quantitative easing (QE), or asset buying, programme at £200bn. The UK is thought to have exited recession in the last quarter of 2009. The MPC said it expected its QE programme to take another month to complete and that the scale of the programme would be kept under review.
The data below shows how the rate of borrowing money has fallen immediately in March 2009.
1. What determines interest rates?
ReplyDelete2. How do interest rates affect the Balance of Payments?
3. Is the Bank of England's decision correct?