If the Bank of England's Monetary Policy Committee decides to raise interest rates, the Bank of England will conduct open market operations to ensure that the equilibrium interest rate is the chosen rate.

Question

Quizplus · Accepted Answer

The Bank of England, like other central banks, uses open market operations as a key tool to adjust the supply of money in the economy, thereby influencing the equilibrium interest rate to align with its target rate. When it decides to raise interest rates, it typically sells government securities to reduce the money supply, which in turn increases the interest rate to the desired level.

If the Bank of England's Monetary Policy Committee Decides to Raise