Monetary Policy: Introduction and Basic Terms

This video introduces monetary policy, focusing on its meaning, execution, and the role of central banks. It covers the functions and characteristics of money, the definition of monetary policy, and the concept of the lender of last resort. The Bank of England's mission to maintain monetary and financial stability is discussed, along with the quantity theory of money, which links money supply to inflation. Key terms like money supply, bank rate, interest rate, and exchange rates are defined, providing a foundational understanding of monetary policy.

What is the quantity theory of money and its significance?

What is the relationship between money supply and inflation?

How do interest rates influence the economy?

Discuss the impact of exchange rates on monetary policy.