Carney Says BOE Policy `Needs to Walk, Not Run, to Stand Still'

Carney Says BOE Policy `Needs to Walk, Not Run, to Stand Still'

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Interactive Video

Business

University

Hard

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The video tutorial explains the concept of the equilibrium interest rate, which maintains output at potential and inflation at target. It discusses how the equilibrium rate is influenced by structural factors like productivity and demographics, as well as short-term forces such as uncertainty. The tutorial also evaluates the recent stance of monetary policy, noting that despite low Bank rates, the policy has been mildly accommodative. It concludes with guidance on future rate rises, emphasizing that they will be limited and gradual due to persistent structural factors and slowly fading short-term headwinds.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary role of the equilibrium interest rate in an economy?

To maintain output at potential and keep inflation at target

To control the stock market

To increase government revenue

To directly set monetary policy

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a structural force affecting the equilibrium interest rate?

Private deleveraging

Uncertainty

Productivity

Public spending

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How have structural and shorter-term forces affected the equilibrium interest rate?

They have stabilized it

They have pushed it down further

They have had no impact

They have increased it significantly

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why are rate rises expected to be limited and gradual according to the transcript?

Due to the persistence of structural factors and gradual fading of shorter-term factors

To increase inflation quickly

Because the economy is growing rapidly

To decrease unemployment immediately

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the expected trend for the equilibrium interest rate in the future?

It will decrease rapidly

It will remain constant

It will fluctuate wildly

It will rise gradually