The Bank of England is considering a change in Bank Rate. The table shows information about the economy.
| Measure | Value |
|---|---|
| Current Bank Rate | 4.75% |
| Proposed Bank Rate | 3.75% |
| Latest annual CPI inflation rate | 1.3% |
| CPI inflation target | 2.0% |
| Number of unemployed people one year ago | 1.55 million |
| Current number of unemployed people | 1.82 million |
| Current business loan interest rate | 6.0% |
| Forecast business loan interest rate after the proposed change | 5.0% |
| Typical expected annual return from planned investment projects | 5.2% |
Using the information in the table, analyse the likely consequences for economic growth, employment and price stability if the Bank of England makes the proposed change.
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.