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Chapter 16: Monetary Policy (page 321)

Who are the MPC?

Short Answer

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9 economists and the governor of the bank of England.

Step by step solution

01

Monetary Policy 

The monetary policy committee (MPC) usually consists of 9 economists, headed by the Governor of the bank of England, who meet once a month to regularly set the proper bank rate as well as discuss and decide what aspects of the monetary policy need to change and be implemented.

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Most popular questions from this chapter

Does the Taylor Rule put a higher weight on resolving the unemployment gap or the inflation gap? Explain.

Suppose a bond with no expiration date has a face value of \(10,000 and annually pays \)800 in fixed interest. In the table provided below, calculate and enter either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown. What generalization can you draw from the completed table?

Bond Price

\( 8,000

Interest Yield, %

________

______

8.9

\)10,000

$11,000

_______

________

________

6.2

Explain the links between changes in the nation's money supply, the interest rate, investment spending, aggregate demand, real GDP, and the price level.

Suppose that actual inflation is 3 percentage points, the Fed’s inflation target is 2 percentage points, and unemployment is 1 percent below the Fed’s unemployment target. According to the Taylor rule, what value will the Fed want to set for its targeted interest rate?

Define Monetary Policy?
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