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    the question is 'discuss the extent to which the monetary policy committee of the bank of england should be concerned about the growth of the moeny supply.'

    i have no clue about it, even don't know where to start to question.
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    what are the consequences of the growth of the money supply. i would start with that.
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    The MPC's main target is to keep/bring inflation nearer its target rate (currently 2%) via setting the interest rate. What are the pros and cons of the growth of money supply - what does it mean? Can any of these pros/cons affect the MPC's decisions, and if so, by how much?
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    Geeze monetary policy is good to make the worms burn
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    (Original post by Chelle-belle)
    The MPC's main target is to keep/bring inflation nearer its target rate (currently 2%) via setting the interest rate. What are the pros and cons of the growth of money supply - what does it mean? Can any of these pros/cons affect the MPC's decisions, and if so, by how much?
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    (Original post by loolyfirst)
    the question is 'discuss the extent to which the monetary policy committee of the bank of england should be concerned about the growth of the moeny supply.'

    i have no clue about it, even don't know where to start to question.
    talk about:

    role of mpc+ boe
    money suplly (various definitions)
    effects of an increase/decrease of money supply on economy
    current policies available to deal with the previous point
    etc..

    hope that provided some help
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    (Original post by J_Alom)
    talk about:

    role of mpc+ boe
    money suplly (various definitions)
    effects of an increase/decrease of money supply on economy
    current policies available to deal with the previous point
    etc..

    hope that provided some help
    thx for your reply

    saying that an increase of money supply causes the upwards pressure on inflation, what policies can be applied to deal with it? I can only come up rising interest rate, what others? and also how to evaluate those policies?
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    (Original post by Chelle-belle)
    The MPC's main target is to keep/bring inflation nearer its target rate (currently 2%) via setting the interest rate. What are the pros and cons of the growth of money supply - what does it mean? Can any of these pros/cons affect the MPC's decisions, and if so, by how much?
    thx. but i am not sure what are the pros or cons of growth of MS, whether or not we talk about marcoeconomic objectives?
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    (Original post by loolyfirst)
    thx. but i am not sure what are the pros or cons of growth of MS, whether or not we talk about marcoeconomic objectives?
    Yep - definitely.

    There are a lot of trade offs between macroeconomic objectives and policies; for example, GDP growth (potentially good) -> less unemployment => higher inflation (bad). So, examine how the growth of money will contribute to the macroeconomic objectives and then link it back to inflation at the end so you can talk about the MPC (as they deal with inflation by setting the interest rate.)


    PS Who neg repped me, and for what reason?
 
 
 
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