In December, the Bank of England reduced interest rates by another 50 basis points after it had cut by 150 basis points in November. But the rate cut may even be larger. Economists "... expect the Monetary Policy Committee [MPC] to cut rates to 2.5 percent,"...while others "...saw a bigger 75 poin cut"...or "a 100 basis point move. "
Reuters, 11/27/200
In order to _ , the Bank of England's rate cut must .

Question

Quizplus · Accepted Answer

The Bank of England's rate cut is intended to stimulate the economy by increasing consumption and investment, which would lead to an increase in real GDP. Lowering interest rates typically decreases the real long-run interest rate, encouraging borrowing and spending.

In December, the Bank of England Reduced Interest Rates by Another