monetary policies 2 Flashcards Preview

macroEcon question answers > monetary policies 2 > Flashcards

Flashcards in monetary policies 2 Deck (3)
Loading flashcards...
1
Q

what is the main policy objective for monetary policy

A

price stability

2
Q

what are the effects of changes in the interest rate on exchange rates

A

Foreign investors get more reward in uk so the demand for the pound goes up which makes the exchange rate increase

3
Q

How the Interest rates affect aggregate demand

A

high interest rates lead to decrease agg demand