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Why might the Bank of England raise the bank rate if inflation rises above 2%?

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) incre...
SF
Answered by Samuel F. • Economics tutor
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Analyse the impacts on the market if a subsidy was granted to cotton producers, and the discuss the consequences for stakeholders

Define the terms in the question: Subsidy, and then explain that it would be a positive externality of production.Draw and illustrate a positive externality of production, ensure to label everything and not ...
AS
Answered by Alex S. • Economics tutor
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What would be the impact of an outbreak of bird flu on the price of eggs in the UK?

A bird flu outbreak would reduce the supply of British eggs, from S to S1, causing prices to rise from P to P1. (A diagram would be then drawn to show the supply curve contracting inwards, causing a new supp...
AG
Answered by Anna G. • Economics tutor
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What is expansionary monetary policy and how does it work?

Expansionary monetary policy is designed to increase economic growth through stimulation of aggregate demand.There are 2 different approaches/sides to modern day expansionary MP:1) Lowering Interest RatesBan...
AF
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Explain what is meant by the term ‘negative externality’ and explain how excessive consumption of alcohol leads to negative externalities.

A negative externality represents disequilibrium between the social cost and benefits that occur from an individual consuming a particular good. The individual only takes into account the private benefit of ...
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Answered by James I. • Economics tutor
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