A small bakery is considering a loan to replace its commercial oven. The bakery expects demand for its products to remain strong. After the Bank of England cuts Bank Rate, the bakery's bank lowers the interest rate on the loan.
State the decision the bakery is more likely to make about replacing its oven, and briefly explain why.
116 exam-style questions on OCR GCSE Economics 3.6 Monetary policy, covering 3.6.1 What is monetary policy, 3.6.2 Monetary policy and macro objectives, and 3.6.3 Effects of monetary policy. Each one has a worked solution and a mark scheme showing where the marks go.