On the Right Track, but not Enough
Tuesday, September 13, 2005
EVERY time the economy heats up, the central bank usually raises interest rates to cool it down. What is known as tight money policy is intended to slow down inflation or maintain the value of the currency. Conversely, if economic performance is seen to be kind of slow, interest rates are lowered to motivate businesses to start up again with the hope that the economy will grow rapidly again thus improving the peoples welfare.
The art of raising
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