A Level OCR Macro Economics Monetary Policy notes written to specification Includes: Monetary Policy, Transmission Mechanism, Keynesian Liquidity Trap, Quantitative Easing, Financial Policy Committee, Forward Guidance and The Bank of England
OCR Macroeconomics Year 2 A2 Full Powerpoint of Notes
OCR Microeconomics Year 2 A2 Full Powerpoint of Notes
A Level OCR Macro Economics - Economic Cycle (Multiplier, Accelerator...)
All for this textbook (5)
Written for
A/AS Level
OCR
Economics
A Level Macro Economics
All documents for this subject (1)
Seller
Follow
charlie114
Reviews received
Content preview
Monetary Policy
Monetary policy consists of the actions of a central bank that determine the size and rate of
growth of the money supply, which in turn affects interest rates
Expansionary Deflationary
Fall in real and nominal interest rates High interest rates on loans and savings
Measures to expand the supply of credit Tightening of credit supply
Depreciation of the exchange rate Appreciation of the exchange rate
Factors considered when setting rates:
• GDP growth and spare capacity
• Bank lending, consumer credit and retail sales
• Share and house prices
• Consumer and business confidence
• Wages, labour and productivity
• Unemployment
• Exchange rates
• International data
• Trade
Distribution of wealth and cuts:
• Savers will lose money
• Homeowners gain
• Unsecured debt becomes cheaper
Evaluation of a cut in rates:
• Commercial banks may be unable or reluctant to lend
• Credit card rates may remain high
• High stock of personal debt may hold back demand
• Fall in income for savers
• Low business or consumer confidence after recession
Transmission Mechanism
• Change in market interest rates
Takes 12 to 24 months for
interest rate changes to have an • Impact on demand
impact on GDP and inflation
• Effect on output, jobs and investment
• Effect on real GDP and inflation
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller charlie114. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.86. You're not tied to anything after your purchase.