growth of the money supply

• what happens If the Central Bank lowers the base rate?

  likely to be increased borrowing by firms and consumers

  
  

  This will result in an increase in consumption and investment
• what is the central Bank?

  Institution that manages a country's money supply and controls interest rates.
• what is the base rate?

  interest rate at which central bank lends money to commercial banks
•  lead to a form of demand-pull inflation
• what is quantitative easing?

  when central banks purchase bonds so they can increase the money supply
• how does the central bank increase money supply?

  through quantitative easing
• what does Q.E lead to?

  increased liquidity and lower interest rates
• what inflation does it lead to?

  demand pull inflation