MONETARY POLICY/ EFFECTS OF MONETARY POLICY
ECB raises interest rates:Hike comes as economic disparities between member states
grow
Posted: April 13, 2011
By Cat Contiguglia - Staff Writer
The European Central Bank (ECB) confirmed its confidence in the strength of the eurozone's economic recovery by increasing the interest rate April 7 to 1.25 percent - a growth of 0.25 percent and the first rise since July 2008. In doing so, the bank has also raised concerns about what sort of effect the rate hike will have on peripheral countries, once again underscoring the dramatic disparities between the 17 eurozone economies.
http://www.praguepost.com/business/8272-ecb-raises-interest-rates.html
By the European Central Bank conducting a plan like this, it not only means that households and businesses will be able to spend less money but at the same time this will still help keep inflation at a steady pace and still stimulate the economy. There are bad sides to this also, by this plan being taken into place the unemployment rate will rise and growth will begin to decline. this policy would be classified as Contractonary Monetary Policy.
grow
Posted: April 13, 2011
By Cat Contiguglia - Staff Writer
The European Central Bank (ECB) confirmed its confidence in the strength of the eurozone's economic recovery by increasing the interest rate April 7 to 1.25 percent - a growth of 0.25 percent and the first rise since July 2008. In doing so, the bank has also raised concerns about what sort of effect the rate hike will have on peripheral countries, once again underscoring the dramatic disparities between the 17 eurozone economies.
http://www.praguepost.com/business/8272-ecb-raises-interest-rates.html
By the European Central Bank conducting a plan like this, it not only means that households and businesses will be able to spend less money but at the same time this will still help keep inflation at a steady pace and still stimulate the economy. There are bad sides to this also, by this plan being taken into place the unemployment rate will rise and growth will begin to decline. this policy would be classified as Contractonary Monetary Policy.
Aggregate Supply/Demand for monetary policy
