Monetary policy is set by the Monetary Policy Committe (MPC) who have meetings every first Thursday of each month to set interest rates. The MPC has 9 members, if you want to find out more, click here.
Thursday, 29 September 2011
Involves the use of interest rates (see Word of the Day) and quantitative easing (changes to the money supply) to achieve the government's policy objectives. Expansionary monetary policy involves decreasing interest rates and increasing the money supply to increase AD and contractionary monetary policy is the opposite; interest rates are increased to deflate the economy and reduce AD.
This post is for everyone on the A2 AQA exam board. There have been changes to the exam and the new exam will require (some) maths. This link here should lead you to the document explaining what the new questions will want you to do. It seems like pretty basic stuff so hopefully you should all do fine! Just wish they'd introduced it on the year of my exam!