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Paragraph 1 – define key terms and set the scene! (let the examiner know that you understand the question)Monetary policy is the manipulation of interest rates and money supply to influence levels o...
The Bank of England (BoE) has a target for inflation of 2.0%. If inflation rises above 2% the BoE will therefore try and decrease inflation. Increasing the bank rate leads commercial banks to (usually) in...
A supply shock happens when an event causes an economy's Short-Run Aggregate Supply (SRAS) curve to shift up or down the Aggregate Demand (AD) curve. In the case of a negative supply shock this shift caus...
Negative externalities are one of the main causes for market failure, meaning that the market is not operating at its optimal level and that there is a loss of social welfare. Negative externalities are o...
A PPF (Production Possibility Frontier) is a curve showing the maximum combinations of two goods and services produced over a period of time, with all available resources used at maximum efficiency.
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