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The first key step to answering this type of IB Economics question is to define the key terms. Aggregate supply is defined as total amount of goods and services that producers of an economy are willing to...

The aim of the Bank of England (BoE) is to keep inflation within the set target of +-1% of 2% CPI. Therefore, as part of it's monetary policy, the BoE increases the Bank rate to lower inflation in the eco...

To answer this question, it is first very important to define productive efficiency and allocative efficiency. A firm is said to be productively efficient if it produces each good at the lowest possible u...

Economic growth is an increase in the real gdp in the economy. One tool that could be used changing the interest rates. Interest rates are the cost of borrowing, and reward for saving. In order to increas...

A fall in interest rates would mean it would be cheaper for consumers to borrow hence increasing the likelihood of consumers borrowing hence consumer spending would increase. Also, a fall in interest rat...