A bakery plans to take out a bank loan to install an additional production line, which would need six extra workers to run it. Before the loan is agreed, the central bank raises its interest rate.

Which outcome is most likely?

The bakery postpones the production line, so the six extra workers are not taken on

Savers earn more interest and buy more bread, so the bakery installs the line and hires staff

The bakery goes ahead as planned, because interest rates affect only households' spending

The bakery's loan becomes cheaper, so it installs the line and takes on six extra workers

A bakery plans to take out a bank loan to install an additional production line, which would need six extra workers to run it. Before the loan is agreed, the central bank raises its interest rate.

Which outcome is most likely?

The bakery postpones the production line, so the six extra workers are not taken on

Savers earn more interest and buy more bread, so the bakery installs the line and hires staff

The bakery goes ahead as planned, because interest rates affect only households' spending

The bakery's loan becomes cheaper, so it installs the line and takes on six extra workers

3.6 Monetary policy

Question 59

Markscheme

3.6 Monetary policy

Question 59

Markscheme

3.6 Monetary policy

Question 59

3.6 Monetary policy Questions

3.6 Monetary policy

Question 59

3.6 Monetary policy Questions