Pages in this set

Page 1

Preview of page 1
James Fortson




MONETARY POLICY (UK & EU)
MANAGING AGGREGATE DEMAND
The government can use the following tools to
manage AD:

1. Interest Rates
2. The Money Supply
3. Exchange Rates

QUANTITY THEORY OF MONEY
This equation shows that an increase in the money
supply will cause an increase in price…

Page 2

Preview of page 2
James Fortson




Northern Rock used a similar model; but instead of using depositor's money, they used the
money from other banks (particularly in the US). The credit crunch and general state of the
world economy caused this bank to go obtain emergency financial support from the Bank
of England.

Blair…

Page 3

Preview of page 3
James Fortson




THE IMPACT OF THE EURO TODAY
The Euro has recently strengthened against the dollar; which
could see increased unemployment. E.g. BMW (German) has
announced job cuts of 5600 whilst Airbus warns it will have to
drastically change it's core structure.




Page 3

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all resources »