If a new diamond mind was to be discovered the price of diamonds would fall. Basic supply and demand. There would be an outward shift in the supply curve. Price would fall. This is true for money. Increase the 'supply of money' and the price or value will fall.
Have a look at this video HERE by the Bank of England which explains how Quantitative Easing works. And another one below.
In total 375 million GBP has been pumped in to the UK economy since March 2009. Has it been effective? Some people argue that it is not working, economic growth has not recovered and confidence, both business and consumer is at all times low. Furthermore, quantitative easing increases the money supply. The value of peoples savings has been eroded - the purchasing power of money has fallen.
However, if there hadn't been this injection what sort of position would the UK economy be in now?
An interesting video for you to look at which discuss the impact of the UK's quantitative easing programme and discuss its effectiveness. Lots of excellent evaluation points which you could use in an exam.
Further reading on the impact of quantitative easing HERE and HERE. Remember Zimbabwe?
Have a look at this video HERE by the Bank of England which explains how Quantitative Easing works. And another one below.
In total 375 million GBP has been pumped in to the UK economy since March 2009. Has it been effective? Some people argue that it is not working, economic growth has not recovered and confidence, both business and consumer is at all times low. Furthermore, quantitative easing increases the money supply. The value of peoples savings has been eroded - the purchasing power of money has fallen.
However, if there hadn't been this injection what sort of position would the UK economy be in now?
An interesting video for you to look at which discuss the impact of the UK's quantitative easing programme and discuss its effectiveness. Lots of excellent evaluation points which you could use in an exam.
Further reading on the impact of quantitative easing HERE and HERE. Remember Zimbabwe?
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