How monetary Policy can be used to stimulate the economy ?

In the economy it is often necessary to stimulate the economy when it is going through a slump or a fall in growth, likewise it may be required to keep growth under control as a country thrives under stable and controlled growth and inflation. In some situations we may require a tool used by the Bank of England here in Britain called monetary policy. This is the use of both interest rates and money supply to help control the level of inflation and growth through the factors that make up aggregate demand. 

This policy directly effects firms and consumers around the country and can often have a powerful effect (give real life example e.g.  Britain, Canada, Japan). 

Further explain the the the mechanism of how the interest rates effect all factors 

Answered by Ankur G. Economics tutor

1575 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain how the diagram for a perfectly competitive firm demonstrates static efficiency.


Discuss the effect of a carbon tax on the level of carbon emissions


Explain why the average and marginal revenue curves for a perfectly competitive firm are horizontal while those of a monopoly slope downwards.


How should I answer data response questions?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences