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Topic updates

Interest Rates and Aggregate Demand and Supply

Geoff Riley

12th February 2023

With central banks in many countries including the UK and the USA raising policy interest rates, we have added two short topic videos to our reference section on how increased interest rates might affect aggregate demand and supply.

In the UK, we might be reaching the peak in base rates during the current tightening phase. Bank of England monetary policy committee member Silvana Tenreyro has said monetary policy is too tight - meaning interest rates are too high - and she would vote for a cut to prevent inflation getting well below the 2% inflation target next year.

Monetary Policy - Interest Rates and Aggregate Demand | A level Economics

Monetary Policy - Interest Rates and Aggregate Supply | A level Economics

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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