Econ exam question

Is manipulating interest rates the best way to target low inflation?

Has anyone written an essay on this? I think this is in my school exam next year - so if anyones done this before, it'd be amazing if you could tell me how you did it.

Reply 1

john !!

14

introduction/. define interest rates and inflation, mention target inflation
Give 2/3 reasons why interest rates are good at controlling inflation
give 2/3 bad points about using interest rates
give an alternative to interest rates
conclude by saying yes or no

Reply 2

~pixie~

this isnt to the thread starter personally, but why do some people post questions that they MUST have some idea how to do? how could you do economics (or depends on the ques) and not know how to do it? you must have a textbook, notes or something...

Reply 3

spurs123

10

~pixie~

this isnt to the thread starter personally, but why do some people post questions that they MUST have some idea how to do? how could you do economics (or depends on the ques) and not know how to do it? you must have a textbook, notes or something...

EXACLTY!!!!....

but to answer the quesiotn...talk aobut Keynesian revolution.....i.e FISCAL POLICY

Reply 4

CKS

OP

what are the benefits and disadvantages of using interest rates though..

Reply 5

minnys85

~pixie~

this isnt to the thread starter personally, but why do some people post questions that they MUST have some idea how to do? how could you do economics (or depends on the ques) and not know how to do it? you must have a textbook, notes or something...

There is a thread called "Subject Specific Help - Please read before starting a thread" (in A-level discussion board) and linked to here for social science (economics etc). That's why so many people come and ask questions like this. Some people still need some help for their work. I think it is alright.

Reply 6

john !!

14

CKS

what are the benefits and disadvantages of using interest rates though..

benefits=control the economy, smooth the economic cycle, without running up a large budget defecit which fiscal policy tends to do
costs=hard to control, time delays, unknown degree of effects can lead to the possibility of economic problems
=can affect variable rate mortgage owners, which can seriously affect the economy (equity withdrawl, negative equity, effects on disposable income and consumer confidence)
=have side effects on exchange rates and budget defecits (high i/r can lead to high e/r lead to large budget defecit and more u/ment pressure from outsourcing etc.)

im assuming this is AS..?
I cant think of much else...