Monetary policy

• Monetary policy is conducted by the Bank of England and involves using the base interest rate or the money supply (eg. quantitative easing) to influence the economy
• The two types of monetary policy are expansionary monetary policy and contractionary monetary policy
• Argentina was trying to promote growth and increase AD by increasing the money supply through quantitative easing. This is expansionary as they were trying to expand the economy.
• The Reserve Bank of Australia were trying to reduce growth and reduce inflation by increasing the interest rate. This is contractionary as they were trying to contract the economy (to prevent inflation).